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Energy Transfer to Build Bakken, Marcellus-Utica Pipelines

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Energy Transfer Partners LP plans to build two new pipeline systems to transport crude oil from the Bakken shale and another to move natural gas from the Marcellus and Utica region.

Energy Transfer announced it will build the Bakken Pipeline, a 1,100-mile crude oil pipeline to transport crude supply from the Bakken/Three Forks production area in North Dakota to Patoka, Illinois. From there, the pipeline will interconnect with the company’s existing 30-in. diameter Trunkline Pipeline, which is being converted from natural gas service to crude transportation service. From Patoka, shippers will be able to access multiple markets, including the Midwest and East Coast by rail, as well as the Gulf Coast via Trunkline to the Nederland, Texas, crude oil terminal facility of Sunoco Logistics Partners LP. Additionally, Energy Transfer will develop a rail terminal facility in Illinois to access East Coast refineries.

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Energy Transfer has secured multiple long-term binding contractual commitments from shippers sufficient to fully support the construction of the 30-in. Bakken Pipeline to Patoka, which will initially provide 320,000 barrels per day of capacity. The company could increase the capacity based on customer demand. Energy Transfer has already begun the process of ordering steel and negotiating construction contracts for the project. The company expects to have the pipeline built and in service, along with the Trunkline conversion completed, by the end of 2016.

Energy Transfer also announced it will build a pipeline to transport natural gas from processing facilities located in the prolific Marcellus and Utica shale areas to numerous market regions in the United States and Canada.

The natural gas pipeline is currently sized to transport 2.2 billion cubic feet (Bcf) per day, but could be expanded to 3.25 Bcf per day depending on demand. Energy Transfer has secured capacity commitments from producers who hold significant acreage positions in the Utica and Marcellus region and has been in negotiations with numerous other shippers who have expressed a desire to contract for capacity. The three largest shippers on the project are American Energy  Utica LLC, Antero Resources Corp. and Range Resources Corp. American Energy and Antero Resources both have options to purchase non-operating equity interests in the project.

The first approximately 400 miles of the project will enable the flow of gas from processing plants and interconnections in Pennsylvania, West Virginia and Ohio to points of interconnection with Energy Transfer’s existing Panhandle Eastern Pipe Line (PEPL) and another Midwest pipeline near Defiance, Ohio. Shippers also will be able to access existing and new industrial markets and potential liquefaction export markets in the Gulf Coast. Additionally, Energy Transfer expects to construct an approximately 195-mile segment from the Defiance area through Michigan and ultimately to the Union Gas Dawn Hub near Sarnia, Ontario, providing producers with access to diverse markets and end-users in Michigan and Canada with access to Marcellus and Utica supplies. 

Energy Transfer plans to have initial service to the Midwest Hub located near Defiance, Ohio and Gulf Coast markets by the fourth quarter of 2016, and the remaining service to markets in Michigan and Canada by the second quarter of 2017.

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