Chesapeake signs as anchor shipper on EPP Marcellus-Utica ethane line

Chesapeake Energy Corp. has signed a long-term contract as anchor shipper on Enterprise Products Partners LP’s proposed long-haul ethane pipeline from the Marcellus and Utica shale regions in Pennsylvania, West Virginia, and Ohio to the US Gulf Coast. The roughly 1,230-mile pipeline would have an initial capacity of 125,000 b/d and could be quickly expanded through a combination of additional pumping horsepower and pipeline looping.

Chesapeake committed to supply 75,000 b/d for the pipeline’s 5-year ramp-up period and can secure additional capacity in the project. The company says it views this agreement as an important step toward obtaining premium transportation pricing for the volumes it will produce in the region.

The project will use a combination of new and existing systems (OGJ Online, Oct. 11, 2011). The binding open season for shippers to commit to the pipeline is open until Nov. 10. The pipeline’s committed shipper transportation rate would range 14.5-15.5¢/gal.

Through connections at EPP’s NGL complex in Mont Belvieu, Tex., ethane production from the Marcellus and Utica shales would have access to every ethylene plant in the US. Enterprise anticipates the pipeline beginning commercial operations as early as first-quarter 2014.

Contact Christopher E. Smith at chriss@ogjonline.com.

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