PITTSBURGH—“There is no doubt that the Marcellus-Utica shale play is changing the flow of energy in the United States,” said Tim Aydt, president of Marathon Pipe Line LLC, a subsidiary of MPLX (NYSE: MPLX), speaking at Hart Energy’s 2018 Marcellus-Utica Midstream conference. MPLX has jumped right into this changing market, adding new pipelines and revamping existing ones to improve connections and capacities. Additionally, the company has 3.8 Bcf per day of gathering, 6.0 Bcf per day of processing and 531,000 barrels per day (bbl/d) of fractionation capacity in the region, through its subsidiary MarkWest Energy Partners LLC.

MPLX, a master limited partnership formed in 2012, and sponsor Marathon Petroleum Corp. (NYSE: MPC), started bringing Appalachian assets online and on stream in 2013. Completed projects to date include the Canton and Catlettsburg condensate splitters, Canton condensate truck unload rack, RIO Pipeline Reversal, and a variety of terminals, truck fleets and river barges. But the most significant project for MPLX has been its Cornerstone Pipeline.

“The Cornerstone Pipeline is the backbone of MPLX’s system,” said Aydt. “It connects our pipeline network to key supply points in the basin.” The 50-mile line—completed in October 2016— can move approximately 198,000 bbl/d of shale liquids to MPLX’s East Sparta tank farm for further distribution.

Cornerstone is connected to the two largest condensate stabilizers and the two largest fractionators in the Utica shale area, the Cadiz condensate stabilizer, Hopedale fractionator and Scio condensate stabilizer and fractionator. MPLX accelerated an eight-mile connection to the Hopedale facility in December 2016, at a time when many other firms were delaying or canceling projects. Additionally, it built a new truck offload in Cadiz for stabilized condensate.

Reaching New Markets

“We have used a combination of existing pipeline systems and construction of new infrastructure to connect Marcellus-Utica production to three markets: local, regional and Canadian diluent,” said Aydt.

Its Cornerstone Pipeline is the backbone of the system MPLX is building in the Appalachian region. Source: MPLX, presented at Hart Energy's 2018 Marcellus-Utica Midstream Conference Local markets include Marathon Petroleum Corp.’s Canton Refinery, which has a 25,000-barrel-per-day condensate splitter. Pipeline deliveries to that refinery started when Cornerstone was put in service in late 2016.

On the regional scale, there are 10 Midwestern refineries now connected that have crude processing capacity of approximately 1.75 million bbl/d. To reach the substantial Canadian diluent markets, MPLX connected directly to Cochin Pipeline and has access to Southern Lights Pipeline. Deliveries to both markets started last year as individual projects were brought online.

“MPLX has spent nearly half a billion dollars to date providing these pipeline solutions, and we anticipate more investment opportunities as the region continues to develop,” said Aydt. “We are the only company that has advanced the liquids pipeline projects that move barrels to the west.”

The company offers flexible pipeline options, multiple destination markets and competitive transportation rates to its customers by leveraging its existing assets. “We build our projects in phases that are designed to allow for expansion as the basin continues to grow its production,” he said.

Butane Is Up Next

Cornerstone was intentionally built with extra capacity to meet demand that MPLX anticipates in the future. The system can be extended to some of the other Utica fractionators or condensate stabilizers, if the market dictates. Future flexibility for LPG movements, including butane, was also designed into the system.

MPLX’s newest opportunity is the Utica Butane Expansion. Today, most butane in the region is moved by either truck or rail. This project would allow butane to be batched in the pipeline along with the condensate and natural gasoline that the partnership is already moving. The exact scoping, timing and connectivity of this project are still under development. Similar to past investments, MPLX plans to leverage its existing assets to meet the market demands, including the 50-mile Harpster, Ohio, to Lima, Ohio, pipeline completed in mid-2017.

“This project is consistent with our strategy of developing infrastructure to support growing Marcellus and Utica production and it signals our long-term commitment to this region,” said Aydt.

That commitment has been many years in the making and looks to continue for the long term. And as Aydt noted in the opening of his talk, it is part of the company’s response to the great shifting of energy flows that has been caused by Marcellus and Utica production.

Peggy Williams can be reached at pwilliams@hartenergy.com.