The right of way is clear and construction is set to begin in March on MPLX’s Cornerstone Pipeline to make the projected late 2016 in-service date.
The batched pipeline system stretches 50 miles from the MarkWest Energy Partners condensate stabilization facility near Cadiz, Ohio, and the Utica East Ohio fractionation facility and condensate stabilization facility near Scio, Ohio, to a Marathon Pipe Line LLC (MPL) operated tank farm in East Sparta, Ohio and to Marathon Petroleum Company LP’s (MPC) refinery in Canton, Ohio.
First announced in 2014, the Cornerstone Pipeline is one of several pipeline systems MPLX has planned to move petroleum products throughout the burgeoning Marcellus and Utica shale plays.
MPC formed MPLX, a master limited partnership, in 2012 to own, operate, develop and acquire pipelines and other midstream assets related to the transportation and storage of crude oil, refined products and other hydrocarbon-based products. MPLX’s assets includes approximately 2,900 miles of pipeline across nine states and in 2015, MPLX acquired MarkWest Energy Partners.
“The Cornerstone Pipeline, like other pipeline projects, has both short and long term economic impacts. During the construction phase of the project, hundreds of skilled tradesmen from around the region will not only earn income, they will spend a portion of their earnings at local businesses,” says Jason Stechschulte, senior engineer, commercial development, MPL, a subsidiary of MPLX. “Also MPL has already begun to hire additional local staff to run and maintain the daily operations of the pipeline. Furthermore, pipeline movements are more cost effective than movements by truck or rail, so adding a low-cost means for producers to move products to customers creates a long-term competitive advantage. That advantage could help the producers in the region justify future development resulting in employment growth and higher local tax revenues.”
MPL is adding capacity at the East Sparta tank farm in conjunction with this project. A project is also in the works to connect the MarkWest fractionation facility, near Hopedale, Ohio, to the Cornerstone Pipeline.
“The Cornerstone Pipeline provides the initial backbone for transportation of Utica shale condensate, natural gasoline and diluent,” Stechschulte says. “Because the Cornerstone Pipeline is a batched system, movements of each commodity type will be scheduled daily from each location.”
MPLX can provide the same quality of service from a single, larger pipeline, versus multiple smaller pipelines.
“The Cornerstone Pipeline has been sized as a 16-in. diameter system to provide ample capacity for Utica shale volumes,” Stechschulte says. “This provides MPL with future connectivity options within the Utica shale for the pipeline.”
Associated with the Cornerstone Pipeline are MPLX’s proposed Utica Build-Out pipeline projects. The Utica Build-Out projects have a planned operational in-service date in 2017. From East Sparta, MPL is expanding several existing pipelines from East Sparta to Heath, Ohio, and Heath to Findlay, Ohio. A new pipeline is planned from Harpster, Ohio, to Lima, Ohio. Additionally, MPL is reversing an existing pipeline from Lima to Robinson, Illinois.
“These projects provide pipeline transportation to additional markets for Utica volumes,” Stechschulte says. “These projects connect many of the Midwestern refineries to the Utica shale production and additionally provide the ability to supply diluent to western Canada.”
MPLX has refined scheduling and scoping on the Utica Build-Out projects as the company finds synergies as a result of the MarkWest acquisition.
“Connection of the Hopedale fractionation facility to the Cornerstone Pipeline is a great example of synergistic value for MPLX,” Stechschulte says. “MarkWest is producing and marketing natural gasoline from this location every day and through the connection to the Cornerstone Pipeline, it will have a pipeline transportation option that is well connected to multiple markets.”
He adds that MarkWest’s operations geographically complement MPC’s and MPLX’s operations particularly in the Marcellus and Utica shale plays where MarkWest has established itself as a leader in gathering and processing.
As for other projects on the horizon, MPLX continually evaluates the market conditions and meets regularly with potential pipeline shippers. The company’s assets provide connectivity to the Enbridge, Southern Lights diluent pipeline via existing pipelines. MPLX is also exploring a potential connection to the Kinder Morgan Cochin Pipeline, for diluents.
Tags: Marathon Petroleum Corp, MarkWest, MPLX, Ohio, Utica, Utica Shale