Enterprise to build ethane pipeline from Appalachia to US Gulf


Enterprise Products said Tuesday it has received enough commitments to move ahead with a planned 1,230-mile pipeline to deliver growing ethane production from the Marcellus and Utica shale regions to the US Gulf coast.

Increased natural gas drilling in areas such as the Marcellus shale in the northeastern US is leading to a growing supply of co-product ethane, a raw material for petrochemical production.

"The willingness of shippers to commit to a term of at least 15 years reflects the long-term potential of shale development in the Appalachian region and provides us with the assurance necessary to build the midstream infrastructure," said Michael A. Creel, president and chief executive of Enterprise's general partner, Enterprise Products Holdings LLC.

The pipeline will begin in Pennsylvania with 595 miles of new pipeline extending to Missouri, where Enterprise plans to reverse an existing pipeline and place it in ethane service.

At the southern end, Enterprise plans to construct a 55-mile pipeline to provide shippers with access to its Mont Belvieu, Texas, storage facility, providing indirect and direct access to US ethylene plants.

In November, Chesapeake Energy - one of the most active drillers in the Marcellus - announced an agreement to supply Enterprise with ethane for the planned pipeline.

Enterprise has seen results soar in recent quarters, helped in part by its $3.3 billion merger with Teppco Partners in late 2009, which created one of the largest pipeline companies in the US.

The company in November reported third-quarter profit surged on contributions from acquisitions and as revenue climbed.

Shares were down 12 cents at $46.26 in recent trading. The stock is up 11% in the past year.

Dow Jones Newswires

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