Will Energy Transfer (ET) ever pull the trigger on a Marcus Hook LPG expansion? The company is noncommittal for now, but East Daley Analytics can see the outline of a future project from several data points in the Northeast market.
First, Appalachian producer Range Resources (RRC) has been expanding in the liquids-rich window in the southwestern Marcellus. RRC is on pace to grow its production just shy of 2% from 2023 to ’24, and expects to see “our production stream continue to have a little bit more of an NGL contribution,” executives said on the 3Q24 earnings call.
Actions mimic words, as Range has 2 rigs drilling behind MPLX’s 2.4 Bcf/d Majorsville-Houston-Harmon Creek G&P systems in southwestern Pennsylvania, according to Energy Data Studio rig data. RRC is the biggest contributor to the MPLX complex and the driving force behind a 300 MMcf/d expansion at the Harmon Creek processing plant. The project has an expected in-service date in 2H26 (refer to the Energy Data Studio visual for the MPLX asset).
Connecting the dots further downstream, the Harmon Creek facility is also expanding de-ethanization capacity by 40 Mb/d. The de-ethanizer facility will alleviate any constraints on supply growth caused by high-Btu gas that exceeds pipeline specs. MPLX also plans to start that expansion in 2H26.
Range ships ethane on Mariner West (to NOVA Chem in Windsor, Canada) and on ATEX Pipeline (to Mont Belvieu export markets), but management recently noted that 80% of its NGL production is exported at the Marcus Hook terminal outside Philadelphia. Management often touts the Northeast pricing premium over Mont Belvieu, and uses ET’s Mariner East and Marcus Hook infrastructure to access European demand.
ET has gone back and forth on a Marcus Hook terminal expansion, in some quarters plugging a project to add refrigeration and storage capacity, and in others staying silent. Yet two data points suggest momentum for the last leg of the trip for a Europe-bound LPG vessel.
The first is a filing by ET at the Federal Energy Regulatory Commission (FERC) disclosing its intent to strip NGLs from the Rover gas pipeline via its Revolution plant at the “Rover-Bulgar Interconnect”. East Daley flagged the ET filing in June. These Revolution-produced NGLs would very likely be shipped on Mariner East to Marcus Hook (see map). An environmental assessment filed in July ‘24 noted a construction timeline of three months beginning in 4Q24, and ET’s latest investor deck this month confirmed construction is underway.
The second point is MPLX’s investment in de-ethanization behind Harmon Creek. Much of RRC’s ethane is already shipped to Europe, and the expanded facility would likely send more ethane across the pond. These two developments just might be enough to get a Marcus Hook expansion to a final investment decision. – Rob Wilson, CFA Tickers: ET, MPLX, RRC.
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