Sunoco plan faces hurdles
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Despite having the apparent support of Congress, Sunoco's plan to transport ethane from the Marcellus Shale through the Philadelphia area is far from a sure bet.
Energy analysts say that the Mariner project, which would pipe ethane derived from shale gas to a Sunoco dock on the Delaware River and then by sea to the Gulf Coast, is an unlikely path for the commodity to find its way to market. Ethane is a valuable raw material for manufacturing plastics.
"There are other ethane projects that don't have as many hurdles, that don't require an act of Congress to get going," said Kristen Holmquist, an analyst with Bentek Energy L.L.C. in Colorado.
The land-sea route through Marcus Hook, which Sunoco Logistics Partners L.P. plans in partnership with MarkWest Energy Partners L.P., received a boost when Congress signaled it would allow three ethane tankers to sail under the U.S. flag. Only U.S.-flagged vessels can carry cargo between American ports.
U.S. Sen. Pat Toomey told a Senate panel that the only obstacle holding up the Sunoco project was legislative approval, which would allow the foreign-flagged tankers to be reflagged as U.S. vessels.
"We have a $300 million to $400 million liquid natural gas facility that is awaiting one activity, one action, to begin construction to create hundreds of jobs in Southeastern Pennsylvania," Mr. Toomey told the Senate Commerce Committee. He said the project would begin "virtually immediately when Congress acts."
But the Congressional action, though critical, is only one step among several that need to be completed before the Mariner project proceeds, said Thomas P. Golembeski, Sunoco's spokesman.
Analysts say the biggest obstacle facing the Mariner plan is the lack of product. Two other pipeline projects moving forward appear to have captured much of the expected Marcellus ethane production through 2017.
First Published November 18, 2011 12:00 am
