Sunoco Logistics: Opposition won't delay pipeline

Local opposition to a Sunoco Logistics Partners Marcellus Shale pipeline should not delay the project or add to its cost, the company's president told investment analysts Wednesday.

Michael J. Hennigan, chief executive of the Philadelphia pipeline company, said the 299-mile Mariner East project, which would transport natural gas liquids on an existing pipeline to port facilities in Marcus Hook, is moving ahead.

"Obviously, whenever you're engaged in a project, you're going to run into some local discussions," Hennigan said. "We're very confident we can work through those issues with all the townships we've impacted."

The company's subsidiary, Sunoco Pipeline L.P., has encountered resistance acquiring rights-of-way along a 50-mile portion of new pipeline in Western Pennsylvania. And some residents in West Goshen Township in Chester County have objected to its proposal to expand its Boot Road pumping station.

Hennigan said the company's experience converting an existing pipeline to transport natural gas liquids from the Pittsburgh area to Ontario demonstrates that the company has a good track record.

Sunoco anticipates the 72,000-barrel-per-day Mariner East project will begin transporting propane this year and ethane next year. The ethane, which is a raw material in petrochemical production, is committed for export to Norway.

Sunoco has also been exploring building a parallel pipeline to transport additional liquids to Delaware County that would begin operations in 2016. That new pipeline would require additional rights-of-way across Pennsylvania.

Antero Resources, a producer in the Marcellus and Utica Shales, recently committed to transport 51,500 barrels per day of ethane, propane, and butane on the new pipeline.

Hennigan says Sunoco needs additional shipper commitments to go ahead with the project, and has extended the "open season" for shippers to sign up. The project is competing with other pipelines that would carry the fuels to the Gulf Coast ports and chemical plants.

Sunoco Pipeline is asking the Pennsylvania Public Utility Commission to clarify its standing as a public utility, a move that faces legal challenges from property owners along the potential pipeline route.