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Pipeline to bring western Pa. natural gas to Philadelphia

By , - Last modified: October 2, 2012 at 9:24 AM

Natural gas from the Marcellus Shale in western Pennsylvania will be bringing new life to a refinery in Philadelphia, and it will pass through the Harrisburg region on its way east.

Range Resources Corp. announced last week it would be the "anchor shipper" on Sunoco Logistics Partners' and MarkWest Energy Partners' joint Mariner East pipeline project. The 15-year deal calls for the pipeline to transport 65,000 barrels a day of ethane and propane from MarkWest processing facilities outside Pittsburgh to Sunoco's Marcus Hook refinery near Philadelphia. Range would supply nearly two-thirds of that quantity – 20,000 barrels each of propane and ethane.

The Mariner East is expected to begin propane shipments in the second half of 2014 and ethane shipments in the first half of 2015, pending construction of ethane infrastructure at Marcus Hook, Range said in a statement. Sunoco said it will spend $600 million on the upgrades.

Until then, MarkWest is shipping propane for Range by rail, Range said.

Range has agreed to sell the ethane to INEOS Europe AG, a British petrochemical company, for shipment to Europe, the American company said. Shipments will start at 10,000 barrels a day and increase to 20,000 over time, Range said.

The Mariner East project will use "existing cross-state pipeline, which is environmentally efficient," state Department of Environmental Protection Secretary Michael Krancer said.

Only 85 new miles of pipeline are needed, according to MarkWest.

By linking Western Pennsylvania resources to East Coast markets, the Mariner East project will create jobs across Pennsylvania, Gov. Tom Corbett said.

Sunoco last year announced it planned to close three major Philadelphia-area refineries. Delta Air Lines acquired one to process jet fuel and the Carlyle Group will process shale oil and gas at another. Range's Mariner East announcement means that all three have won reprieves.

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