June 8, 2018 / 4:54 PM / in 17 days

Range finds alternatives to ship NGLs due Penn. Mariner East shutdown

(Reuters) - U.S. oil and natural gas producer Range Resources Corp has found alternatives to ship natural gas liquids (NGL) to customers during the shutdown of Energy Transfer Partners LP’s Sunoco Mariner East 1 liquids pipeline in Pennsylvania.

Range said in a note to investors and analysts on Thursday that it has capacity on the Mariner East 1 pipeline for 20,000 barrels per day (bpd) of both ethane and propane.

Mariner East 1 was suspended on May 25, following a ruling by a Pennsylvania Public Utility Commission (PUC) Administrative Law Judge.

ETP has asked the PUC to overturn the ALJ’s ruling on Mariner East. Analysts have said they expect the PUC to make a decision at or before a meeting on June 14.

This was the second time this year that the PUC shut flows on the Mariner East 1 pipe. The state stopped liquids flows for over eight weeks from March to May after sinkholes were found near the pipeline.

As one of the largest NGL producers in the United States, Range said it has the ability to transport about 41,000 bpd of ethane on pipelines other than Mariner East 1 and its marketing team has already executed agreements to move some of the Mariner East volumes on other pipes.

Range said it can also sell some ethane into natural gas pipelines in the region. Natural gas is primarily made up of methane. Energy companies, however can mix ethane, which is usually more valuable than methane, with methane if there is not enough liquids pipeline capacity to ship ethane.

As for propane, Range said it has access to another pipeline and to rail-cars that will allow its product to continue to flow to customers.

Range said it expects that second-quarter NGL pricing will remain near the low end of previous pricing guidance of 32 percent to 36 percent of U.S. West Texas Intermediate crude oil.

Mariner East 1, which started service in the 1930s transporting refined products from the Philadelphia area to western Pennsylvania, was repurposed and expanded to transport propane in 2014 and ethane in 2016 from the Marcellus and Utica shale fields in western Pennsylvania to customers in the state and elsewhere, including international exports from ETP’s Marcus Hook complex near Philadelphia.

Reporting by Scott DiSavino; Editing by Andrea Ricci

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