NGL Capacity and Energy Infrastructure Development in the US

Pipeline projects like Mariner East increase access to a vast and reliable store of natural gas liquids and provide manufacturers a tenable opportunity to revive energy competitiveness and connectivity in Pennsylvania and across northeast U.S.A.

According to a recent article published by Forbes, “being a major gas producing region, entire Appalachia needs more gas infrastructure to move gas to markets. We keep hearing about the pushback on pipelines, but make no mistake: the buildout is on.” The piece detailed that “driven by the Marcellus and Utica shale plays, Appalachia will easily be the largest supplier of new natural gas in the U.S…[and] as natural gas continues to rise in the U.S. electric power system, doubling its market share of our power generation to 35% since 2005, more infrastructure to move gas is critical.”

Correspondingly, The Philadelphia Inquirer reported that “Pennsylvania’s natural gas industry produced a record 5.1 trillion cubic feet of gas in 2016, up 11 percent over the previous year.” In fact, the Pennsylvania Department of Community & Economic Development stated that, “Pennsylvania is the second-largest producer of natural gas in the country – with production up more than 2,400% between 2005-2014 – but our natural gas market extends beyond production. Natural gas usage fits into many aspects of our economy, including heat, power, downstream manufacturing, and electric generation. Other natural gas uses, such as compressed natural gas, offer inexpensive transportation fuel to companies who locate in the state…Natural gas and natural gas liquids (NGLs) – particularly ethane and propane – are powering out economy.”

Mariner East 1 is 70k BPD and Mariner East 2 has the capacity for 250k BPD. Given that U.S. Geological Survey (USGS) says there’s about 6,000 cubic feet in a barrel of natural gas, the Mariner East pipelines have a total capacity of 1/92 Bcf/d. According to The Philadelphia Inquirer, “the number of ships exporting Marcellus Shale natural-gas liquids out of Philadelphia’s port quintupled in 2016, according to the Maritime Exchange, reflecting an increased flow of propane and other materials through Sunoco Logistics Partners’ Marcus Hook terminal…Exports of the natural-gas liquids, mostly ethane, increased to 34 vessels last year, up from six ships in 2015. The volumes are likely to increase if Sunoco completes third-quarter expansion of its Mariner East pipeline system that would increase its capacity from 70,000 barrels a day to 345,000 barrels.”

This will make a real difference in Pennsylvania and across the region. The capacity of the Mariner East projects will play an important role in the Northeast hub to distribute the NGL to domestic and global markets, and its manufacturing facilities will use the natural gas as raw input to make a range of products ranging from paper to plastic, paint to pharmaceuticals. According to a recent piece by Wall Street Journal, such product development efforts are surging in the U.S., “because at a time of uncertainty over when demand for transportation fuels may peak, due to electric cars and ride sharing, the world’s appetite for plastics is expected to rise for decades to come.”

This is good news for Pennsylvania and will translate into increased energy connectivity and workforce development for “decades to come.”