Sunoco Announces Delay to Mariner East 2 Pipeline and Review on Expansion

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A Mariner East construction site in Marcus Hook--via Delaware County Council, Philly.com
Boot Road Pumping Station
The Boot Rd. Sunoco pumping station in Chester County.

Tuesday bought temporary relief for angry landowners along the planned path of the unpopular Mariner East 2 pipeline project, as Sunoco announced that construction on the project has been pushed back due to issues in obtaining all the required permits, writes Andrew Maykuth for Philly.com.

The Chief Executive of Sunoco Logistics Partners L.P., Michael J. Hennigan, notified investment analysts that additional time was necessary to secure a number of the permits that are mandatory for the cross-state pipeline construction project to begin.

“I don’t like the word delay,” he said in response to an analyst who posed a question using that term, and added that the extended review was “not an intentional action” on the part of any regulatory agency. Hennigan also did not mention any specific issues that the company is facing in order to secure the rights from hesitant landowners along the pipeline route.

To get the green light, the pipeline project has to secure permits from a number of both federal and state agencies including among others, the U.S. Fish and Wildlife Service, the Pennsylvania Department of Environmental Protection, and the U.S. Army Corps of Engineers.

Mariner East 2 will run through Pennsylvania, West Virginia, and Ohio to deliver Marcellus Shale natural-gas liquids to Marcus Hook. The pipeline will cross 420 properties in ten townships in Chester County, from Elverson, West Nantmeal, East Nantmeal, and Wallace, to Upper Uwchlan, Uwchlan, West Whiteland, West Goshen, East Goshen, and Westtown.

Sunoco
Sunoco’s proposed Mariner 2 East Pipeline route.

The company has already held several informative meetings in the County to try and alleviate the fears of landowners, with varying degrees of success. Considering the fact that Sunoco is considered a public utility corporation, it has the right to build the pipeline on private land through the use of eminent domain, a fact that is additionally angering landowners who feel they are being railroaded without any legal recourse.

“We respect landowner rights, we recognize the enormous responsibility that comes with eminent domain authority, and use that authority only as a last resort, when negotiations with a landowner have failed and can impede the successful completion of the project.” said Jeff Shields, a Sunoco spokesman in a statement after the company started eminent domain proceedings against two landowners in 2015.

The new pipeline will follow a similar route to the existing Mariner East pipeline, which started propane deliveries last year and will commence ethane deliveries to Sunoco’s terminal in Marcus Hook this month. It will significantly expand the current capacity, raising it from 70,000 barrels a day to 345,000 and will distribute natural-gas liquids extracted in the Marcellus and Utica Shale areas. However, the construction delay for the Mariner East 2 pipeline has moved the start of the project from this year into early 2017.

Also, while Mariner East 2 is already planned to commence construction, Sunoco is researching the market to determine if there is enough demand to warrant the construction of a third pipeline, adjacent to Mariner East 2. However, due to uncertain energy prices and the lack of a firm commitment from shippers, it still remains in the evaluation stage.

Hennigan commented that the Mariner East 2 delay “kind of gives us a little bit more time” to properly evaluate whether a further expansion is something the company wants to commit to. In case the expansion gets the go-ahead, Sunoco is planning to build it simultaneously with Mariner East 2 to save costs.

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