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NGLs Week is PetroChem Wire's comprehensive summary of price trends, upstream and downstream costs, operations news and supply/demand forecasts. The report contains everything you'll need to understand what's happening in the NGL markets.

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Pennsylvania halts construction on Mariner East 2 line; NGLs jump

HOUSTON, January 3, 2018 (PCW) – The Pennsylvania Department of Environmental Protection on Wednesday said it was suspending construction of Energy Transfer’s Mariner East 2 NGL pipeline until further notice.

The 275,000 b/d pipeline would move NGL and other refined products from Appalachia to the Marcus Hook facility, primarily for export. The system has been delayed on multiple occasions by various permitting issues and several drilling and water contamination violations. Mariner East 2 was expected to go into service in 2Q.

ETP subsidiary Sunoco, which is building the pipeline, is expected to address water well impacts in Silver Spring Township, identify various construction activities and submit a detailed operations plan to the DEP, among others.

“Until Sunoco can demonstrate that the permit conditions can and will be followed, DEP has no alternative but to suspend the permits,” said DEP Secretary Patrick McDonnell. “We are living up to our promise to hold this project accountable to the strong protections in the permits.”

The ethane market had an immediate and visceral reaction to the news with longer-dated packages trading heavily immediately following the DEP’s order. While the front-month is trending upward, coming in around 25.125 cpg at midday, the back of the forward curve has narrowed considerably. Propane, another commodity expected to be more significantly exported upon the in-service of Mariner East 2, also saw volatile trading by mid-Wednesday. The back of the LST propane curve was also narrowing considerably, despite a more bullish overall complex comprised of rising crude, stronger exports and increased heating demand. -- Samantha Hartke

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