Sunoco announced Wednesday that its shuttered Marcus Hook refinery will be reborn as a facility to process Marcellus Shale natural-gas products, fueling new construction and new traffic through the Delaware River port.
Sunoco’s pipeline subsidiary, Sunoco Logistics Partners L.P., is moving forward with a plan to transport high-value propane and ethane by pipeline from western Pennsylvania to Marcus Hook, where the materials will be processed in a new plant and shipped by sea to domestic and export markets.
State officials hailed the project – which Sunoco calls Mariner East – as a big boost for Pennsylvania’s Marcellus Shale industry by connecting the areas producing natural gas in western Pennsylvania to markets linked to Philadelphia.
“I have long held that the Marcellus Shale is an important resource that over time would benefit the entire commonwealth,” Gov. Corbett said in a statement.
The pipeline project is the latest industrial venture built on confidence that the Marcellus Shale, where full-scale production began barely four years ago, represents a long-term, reliable energy supply.
Sunoco Logistics announced the Mariner East project in 2010 as a way to repurpose an existing, underused Sunoco pipeline that has historically moved refined products from east to west.
Sunoco Logistics and its partner, MarkWest Energy Partners L.P., conceived of reversing the flow of the pipeline to move the abundance of natural-gas liquids derived from the “wet” gas produced in western Pennsylvania. MarkWest, based in Denver, is a leading processor of natural-gas liquids.
The Mariner East project envisions moving ethane and propane from Marcus Hook by sea to petrochemical plants overseas or along the Gulf Coast that value the natural-gas liquids as a raw material for plastics.
Range Resources Corp., the Marcellus pioneer whose drilling operations are concentrated in liquids-rich parts of southwestern Pennsylvania, has signed a 15-year agreement as the anchor shipper. Range has committed to provide 40,000 barrels of the project’s 70,000-barrel-per-day capacity.
Range Resources, based in Fort Worth, Texas, has already lined up a customer for its ethane. It announced Wednesday that it has signed a separate 15-year agreement with affiliates of INEOS A.G., a Swiss petrochemical producer that will take delivery of the material at Sunoco’s Marcus Hook docks. INEOS has plants in Europe, the Americas, and Asia.