GPA '18: MarkWest VP discusses moving NGL out of the Northeast

AUSTIN—James Crews, Vice President of Northeast Business Development for MarkWest, gave a talk on Day 2 of the 2018 GPA Midstream Annual Convention about the company's expanding operations in the Northeast US.

MarkWest, which was acquired by Marathon Petroleum Corp. in 2015, treats and dehydrates gas from the Marcellus and Utica shale basins, and is the largest processor and fractionator in the region. It also has a strong footprint in the STACK play and is growing its presence in the Permian basin.

Total natural gas supply in the US is forecast to grow by approximately 38 Bft3d from 2017 to 2030. This will include 16.9 Bft3d from Marcellus and Utica, 11.2 Bft3d from the Permian, and 6.5 Bft3d from the Haynesville play. In the Marcellus/Utica shales, MarkWest operates 3.8 Bft3d of gathering capacity, 6 Bft3d of processing capacity and 531 Mbpd of C2+ fractionation capacity.

Economics and moving gas out of the Northeast. Major residue gas takeaway expansion projects will originate at MarkWest facilities and are expected to improve Northeast basis differentials, Crews said. Ethane demand is growing as steam cracker development continues on the Gulf Coast and in the Northeast.

MarkWest has situated all of its deethanizers with its gas processing plants to acquire more interstate pipeline takeaway capacity. "It was an expensive decision that allowed us to exhaust all of that ethane for which we still don't have markets," Crews said.

However, existing and expanded pipelines do provide options to Canada, the Gulf Coast and other ethane-consuming regions, and Shell is also likely to build a new cracker that could consume a significant volume of Marcellus/Utica ethane, the VP noted.
"We're slowly starting to get a solution to ethane in the basin, other than rejection," Crews said. He estimated an ethane volume of approximately 600 Mbpd in the Marcellus/Utica basin, but pegged ethane recovery at only 250 Mbpd. "That means we are rejecting about 300 Mbpd of ethane into the gas stream," Crews said.

"The economics, even at low residue prices, are better for rejection than they are for recovery," he continued. "It's important that we get into these new markets for recovery so that we can create local markets for ethane." Crews noted that the completion of the Mariner East pipeline would aid in this effort.

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