Corrected: US Blue Racer reaches agreements to process Utica natgas

27 January 2014 18:37  [Source: ICIS news]

Correction: In the ICIS story headlined “US Blue Racer reaches agreements to process Utica natgas” dated 27 January 2014, the unit of measurement for the processing plants should be in million cubic feet/day, not bbl/day. A corrected story follows.

(clarifies Seneca complex, paragraph 22)

HOUSTON (ICIS)--Blue Racer Midstream has reached long-term agreements with several energy producers to process natural gas from the Utica shale in the northeast US, the company said on Monday.

The Utica shale is rich in natural gas liquids (NGLs), which US petrochemical producers use for feedstock.

Blue Racer said it has the largest rich-gas gathering system in the Utica, which includes nearly 600 miles (965 km) of pipelines in 24 counties in Ohio and West Virginia. Altogether, the pipeline system can gather more than 1.5 billion cubic feet/day (bcf/day) of natural gas.

The US-based company is already operating its Natrium natural gas processing plant in Marshall County, West Virginia. The plant has a processing capacity of 200,000 bbl/day.

Under the Natrium II project, capacity at the complex will expand to 400 million cubic feet/day (mcf/day) by early March 2014, Blue Racer said.

The company is also building its Berne processing complex in Monroe County in Ohio. It should commission the first plant by the end of the third quarter with a processing capacity of 200 mcf/day, Blue Racer said.

Blue Racer plans to build two more 200 mcf/day processing plants at the Berne complex, bringing total capacity there to 600 mcf/day. No start-up date has been given for this additional capacity.

Regarding fractionation capacity, Blue Racer currently has 46,000 bbl/day at Natrium. Fractionation capacity should reach up to 126,000 bbl/day at the complex by March 2015.

Blue Racer will have access to Enterprise's Appalachia-to-Texas Express (ATEX) line. In the future, Natrium will also connect to Sunoco Logistics' Mariner East and Mariner West pipelines as well as Enterprise's TEPPCO pipeline, Blue Racer said.

Like several other companies, Blue Racer is increasing processing capacity in the US northeast as demand for NGLs is expected to rise because of new pipelines and proposed crackers.

Enterprise plans to start commercial service this month at the 1,230-mile ATEX pipeline, which starts at Washington County, Pennsylvania, and ends at the company's Mont Belvieu NGL hub in Texas.

ATEX will have an initial capacity of 125,000 bbl/day, expandable to at least 265,000 bbl/day.

The first phase of Sunoco's Mariner East pipeline will transport about 70,000 bbl/day of NGLs from the Marcellus shale to the company's Marcus Hook facility in Pennsylvania. The ethane from Marcus Hook will be shipped overseas to INEOS's crackers in Europe.

Mariner East should be able to transport propane by the second half of 2014. It should deliver both propane and ethane in the first half of 2015.

Sunoco has since started an open season for the Mariner East 2, which should be operational in early 2016.

Meanwhile, Mariner West has already started delivering ethane from the Marcellus to NOVA Chemical's petrochemical complex in Sarnia, Ontario, in Canada.

In addition, Williams and Boardwalk are building an NGL pipeline from the Marcellus that have a capacity of 200,000 bbl/day. 

Shell is considering plans for a petrochemical complex in Pennsylvania, which will include an ethane cracker.

Odebrecht, Brazil's major contractor, is considering developing an ethane cracker and three polyethylene (PE) plants in a project called Ascent, short for Appalachian Shale Cracker Enterprise.

Odebrecht would oversee Ascent’s investment and financing as well as the operation of water and electric utilities. Brazil-based producer Braskem would be responsible for petrochemical-related activities as well as the marketing of the PE.

Given the potential outlets for northeast-based NGLs, several companies besides Blue Racer are developing processing, fractionation and storage capacity in the region.

Those projects include the Utica East Ohio processing complex, which is being developed by Access Midstream, M3 Midstream and Ev Energy Partners; the Hickory Bend processing complex being developed by Pennant Midstream; the Seneca complex being developed by MarkWest Energy Partners to process gas produced by Antero Resources; and many being developed to serve the Marcellus and Utica by Markwest Energy Partners.

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By: Al Greenwood
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