AP News

Range announces Marcellus pipeline, export deals


PITTSBURGH (AP) — A gas drilling company has announced deals to ship natural gas products from western Pennsylvania to a Philadelphia-area terminal, and to overseas customers.

Range Resources Corp., based in Fort Worth, Texas, said in a release Wednesday that it has signed a 15-year agreement with Sunoco Logistics Partners, L.P. to ship 20,000 barrels per day of propane and the same amount of ethane to a terminal at the former Marcus Hook refinery site, starting in late 2014.

The products were extracted from the Marcellus Shale formation, which stretches across much of the state, deep below the surface, and contains massive amounts of natural gas.

Ethane is a form of gas that can be processed into other products such as plastics. Range also gets access to large propane storage tanks at the facility.

Range also announced a 15-year deal with INEOS Europe AG to export 10,000 barrels per day of ethane, starting in 2015.

Sunoco said it plans to build new facilities at Marcus Hook to process, store and distribute propane and ethane to local, regional and international markets. The company said it expects to invest more than $600 million in the projects and predicted that up to 450 people could be employed over several years.

Sunoco shut down the Marcus Hook refinery in February, laying off about 490 employees.

One energy expert said the move makes sense, since low domestic prices for natural gas have squeezed energy company profits.

Kenneth Medlock, a professor of energy and resource economics at Rice University in Houston, said bountiful U.S. production of ethane, propane and butane — which are all types of natural gas — is creating a glut in markets and depressing prices. The same thing has happened with so-called "dry" natural gas.

"The only way to get out of it is the export market," Medlock said.

Jeff Ventura, Range's president, said the project will help provide the northeastern United States with heating fuel and open global markets for ethane.

Gov. Tom Corbett hailed the agreements, saying they will create jobs across Pennsylvania.


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