1-2-3 - More on MPLX's Plan to Pipe Northeast Condensate and Natural Gasoline

More than four years after the Utica and the “wet” part of the Marcellus became a hot spot for drillers, the field condensate and natural gasoline produced there are still moved to market by barge, rail and truck. A three-part, $500 million plan by MPLX LP and the midstream master limited partnership’s (MLP’s) subsidiaries, now well under way, will enable more efficient pipeline transport of these important hydrocarbons to Midwest refineries, Western Canadian diluent pipelines and other end-users. To hold down costs, the effort involves a creative mix of new and existing pipelines. Today we continue our review of MPLX’s plan with a look at its “Utica Build-Out Projects.”

In Episode 1 of this series we discussed the rise (and recent leveling off) in production of natural gas, natural gas liquids (NGLs) and superlight crude oil (also known as field condensate) in the Utica play in eastern Ohio and the liquids-rich portion of the Marcellus in western Pennsylvania and northern West Virginia. We noted that while most of the market’s attention goes to either natural gas or to lighter NGLs like ethane, propane and butanes, the three-state region produces sizable volumes of natural gasoline (an NGL also known as plant condensate) and of superlight crude (also known as field condensate or lease condensate), both of which are important products that have the potential for value uplift. Plant condensate/natural gasoline is used as a gasoline blending agent, a feedstock for steam crackers (see RBN Drill Down report What’s Crackin’ with Steam Crackers) and as a diluent –– that is, blended into heavy bitumen crudes in Western Canada to reduce viscosity and enable them to flow more easily through pipelines. Among other things, field condensate can be blended into crude oil, run as a feedstock at refineries and condensate splitters (see Dancing in the Dark), or used as diluent. Marcellus/Utica production of field condensate and natural gasoline rose sharply starting in 2013; currently the three-state region is producing about 110 Mb/d of field condensate and about 50 Mb/d of natural gasoline. To date, no pipelines are in place to move them out, leaving field condensate and natural gasoline producers with only three delivery options (tank trucks, rail tankcars, and Ohio River barges), but that is about to change.

The Backstage Pass to RBN Energy: Now Expanding to VIP Backstage Pass

Three years ago, we launched Backstage Pass, our premium subscription service that provides access to our Drill-Down reports, archive access to blogs, our Spotcheck indicators, RBN Fundamentals Webcasts, and last but not least, our periodic Backstage Pass Get-Togethers.  Backstage Pass has been hugely successful, and we’ve had a number of requests to expand the program to include some of our other products and services, which we are doing now.  We are also making a few other changes to the program.  

But don’t panic!  If you are currently a subscriber, or even if you sign up before February 1, 2017 you still will pay only the low-low price of $75.00 per month.  So, no price increase for existing subscribers or anyone who takes advantage of our ‘2016 grandfathered’ pricing.  But starting in February, the price will be going up to $90.00 per month.

There are some other big advantages of this grandfathered deal.  

  • First, you get access to all 35 of the Drill Down reports that we’ve done over the past 3 years, instantly, and the new ones to be published during your subscription.  Most are as relevant today as they were when originally published.  After February 1st, new subscribers only receive the last 6 months of Drill Down reports.
  • Second, you get access to daily blog archive going back to our very first blogs five years ago.  Starting on February 1, if you don’t have a Backstage Pass you will not be able to access blogs older than five days.   
  • Third, there are discounts available.  If you subscribe for a year, you get a 15% discount, or only $918 for the year.  And if your company takes advantage of our multi-seat or corporate subscription programs, further discounts are available.  More information here.
  • Fourth, you can elect to step up to our all-new VIP Backstage Pass™,  that rolls together Backstage Pass with subscriptions for our Natgas Billboard (daily natural gas supply, demand, inventories, and pricing), NGL Voyager with Data File (twice monthly NGL market analysis) reports and free registration for our semi-annual School of Energy conferences, along with video replay of the entire conference.  And with a 10 or more multi-seat subscription of corporate subscription to VIP RBN Backstage Pass™, Rusty Braziel will make an in-person presentation of RBN’s latest Market Macro, our current assessment of crude oil, natural gas and NGL markets, including production trends, supply/demand balances, infrastructure developments and our outlook for pricing. 

To make sure you have access to our grandfathered pricing and services, just go to the Backstage Pass subscriber page and sign up NOW!  For more information on annual subscription discounts and the VIP Backstage Pass, click here and we’ll get the information to you.

Thanks again for your support and we look forward to providing even more energy market information to you in 2017.

While other efforts to develop field condensate and/or natural gasoline pipelines out of the Utica and wet Marcellus have failed or faltered, Findlay, OH-based MPLX –– a master limited partnership (MLP) formed by Marathon Petroleum Corporation (MPC) –– has hung in there, and is finishing up the first part of a three-part pipeline solution. The core element of the plan’s Part 1, whose aim is to pipe a good bit of Marcellus/Utica field condensate to area refineries, is MPLX’s aptly named Cornerstone Pipeline, which includes a new 42-mile, 16-inch-diameter pipeline (longer red dotted line in inset map in lower right of Figure 1) that runs from a condensate stabilization facility near Cadiz, OH owned by MarkWest Energy Partners LP (a subsidiary of MPLX) to MPLX’s East Sparta, OH tank farm, while also connecting to Utica East Ohio Midstream’s (UEO) 30-Mb/d condensate stabilizer and NGL fractionator in Scio (OH) along the way. From East Sparta, Cornerstone runs another eight miles (with 8-inch-diameter pipe; shorter red dotted line in inset map) to MPC’s 93-Mb/d refinery in Canton, OH. Both of the Cornerstone Pipeline segments are scheduled to be online in early October 2016. By the end of 2016, MPLX plans to complete the Hopedale Connection (orange dotted line in inset map), an eight-mile, 16-inch-diameter pipeline that will transport natural gasoline from MarkWest’s Hopedale (OH) fractionator to a Cornerstone interconnection about five miles northwest of Cadiz. Because field condensate and natural gasoline are best kept separate, MPLX plans to transport them in “batches” (see Refined, Piped, Delivered –– They’re Yours for an explanation of how batching works). MPLX’s plan is to run mostly condensate through the pipeline from East Sparta to MPC’s Canton refinery. (The refinery has a 25-Mb/d condensate splitter that today is being 100%-supplied by truck; condensate splitters are simple refineries that process condensate into its component fractions – mostly NGLs, naphtha and distillate or jet kerosene.)

To access the remainder of 1-2-3 - More on MPLX's Plan to Pipe Northeast Condensate and Natural Gasoline you must be logged as a RBN Backstage Pass™ subscriber.

Full access to the RBN Energy blog archive which includes any posting more than 30 days old is available only to RBN Backstage Pass™ subscribers. In addition to blog archive access, RBN Backstage Pass™ resources include Drill-Down Reports, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. If you have already purchased a subscription, be sure you are logged in For additional help or information, contact us at info@rbnenergy.com or 888-613-8874.