Range Resources sets Mariner East Project and New Ethane Sales

Mariner East Project

BUSINESS WIRE is reporting a news release as excerpted below, dated September 26^th:

RANGE RESOURCES has announced that a subsidiary has signed a 15-year agreement with Sunoco Logistics Partners to become the anchor shipper on the Mariner East Project subject to final approval by FERC. The Mariner East Project is a pipeline, processing and export project that will interconnect the natural gas liquids resources in southwest Pennsylvania to Sunoco’s existing infrastructure and international port at its Marcus Hook facility near Philadelphia.

The Mariner East Project is subscribed to transport 65,000 barrels of ethane and propane from the MarkWest Energy Partners processing facilities at Houston, Pennsylvania, located outside of Pittsburgh, to Sunoco’s Marcus Hook terminal and dock facilities near Philadelphia. Once transported to the Marcus Hook facilities, the ethane and propane will be fractionated into purity ethane and propane for delivery and sale to domestic and international customers. The Mariner East Project is expected to commence pipeline deliveries of propane in the second half of 2014. Ethane deliveries are forecasted to start in the first half of 2015 after additional ethane facilities are constructed at Marcus Hook. In the interim, MarkWest is transporting on behalf of Range a portion of its propane sourced from their Houston processing and fractionation complex to the Marcus Hook facilities by rail for sales to domestic and international customers.

As the anchor shipper under the agreements, Range would have firm transportation of 40,000 barrels per day (20,000 barrels of ethane and 20,000 barrels of propane). Under the agreements, Range would have access to a very significant pro rata share of the 1 million barrels of propane storage at the facility and could utilize its full capacity commitment for propane deliveries until the ethane facilities are in place. In addition to Marcus Hook’s truck and rail off-loading facilities, potential exists for Range to deliver propane to Mid-Atlantic customers should Sunoco decide to deliver propane through its northeast pipeline system and expand its existing terminal assets.

INEOS Ethane Sales Agreement -

Range also announced that its subsidiary has executed a 15-year ethane sales agreement with INEOS Europe AG for delivery at Sunoco’s Marcus Hook dock facilities. The agreement is effective upon FERC approval of the Mariner East Project. INEOS is a global manufacturer of petrochemicals, specialty chemicals and oil products and currently plans to utilize its own ship fleet to take delivery of the ethane at the Marcus Hook dock facilities. Contracted sales volumes will start at 10,000 barrels per day in the first half of 2015 and increase over time to 20,000 barrels per day.

Other Ethane and Propane Sales Agreements -

Since July 2012, MarkWest has been transporting a portion of Range and other producers’ propane to Marcus Hook for export to international markets which are currently paying a price greater than recent Appalachian prices. During third quarter 2012, Range participated with Sunoco and MarkWest in the export of a combined total of 280,000 barrels of propane on two export ships. The current contract provides for propane sales to continue through the remainder of the year. Other short-term propane sale arrangements are expected in the interim using the Marcus Hook facilities until the Mariner East Project is fully operational.

As part of these comprehensive transportation solutions, MarkWest is expanding its natural gas liquids infrastructure to include new de-ethanization capacity at its Houston (PA), Majorsville (WV), and Harrison (OH) complexes. By the end of 2014, MarkWest will be able to recover approximately 115,000 barrels per day of purity ethane from the Marcellus and will have total fractionation capacity of 275,000 barrels per day to accommodate the growth in wet gas production.