Philadelphia Freedom

At a time when United States railroads are jammed with pressurized cars carrying propane, the Sunoco Logistics natural gas liquids (NGL) export terminal just outside of Philadelphia is liberating barrels to the water, while giving the Marcellus shale player its own optionality for ideal takeaway.

The company has begun an export program that is unheard of amid US propane terminal operators. The big difference? Sunoco is handling its own freight and deliveries of waterborne propane cargo, while the rest of US players’ involvement stops at their own dock space. 

Sunoco’s exported volumes are moving much more smoothly these days thanks to the start-up of the Mariner East I pipeline, which last month ramped up throughput to 20,000 b/d. Compared to sourcing an export terminal with messy railcar operations, schedulers are surely reveling.

The takeaway of Marcellus-produced NGLs has become a taxing problem on northeastern marketers, who began tucking spare supply away in all the smaller rail-fed caverns at full force.

Williams has seen its inbound summer rail capacity to a midcontinent hub in Conway, Kansas, fill up for the first time ever. And at the end of April, Norfolk Southern Railway embargoed in-bound NGL railcars to a hub in Hattiesburg, Mississippi. As the land-locked and rail-fed hubs fill to the brim, Sunoco’s geography couldn’t be more perfect.

The site at Marcus Hook, Pennsylvania, once a mothballed refining complex, has plans for total reinvention, and at a distance of just 300 miles from the Marcellus and Utica shales. By the end of the third quarter, the export hub will become the first of its kind in the US – one that can export ethane, the lightest petrochemical feedstock. Sunoco continues to evaluate building out petrochemical infrastructure.

Meanwhile fourth quarter east coast railed volumes of NGLs surged. CSX saw traffic increase by 33pc, while Norfolk Southern saw traffic go up nearly 8pc year-on-year.

NGL production in the Appalachian region averaged 190,750 b/d in 2014, a 120pc gain from the 2013 average, according to federal data.

Life, liberty and the pursuit of shale comes at a price. And Sunoco’s escape route is turning otherwise trapped NGLs into a bunch of ex-patriots.

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