Sunoco Logistics Mariner East Project

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Jeffrey Cobb
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1 Sunoco Logistics Mariner East Project

2 The Mariner East Project-Overview PA company moving a local product, creating local jobs 2 Approximately $3.0 billion project: Build infrastructure in Pennsylvania to bring Marcellus/Utica shale natural gas liquids (NGLs) to the Marcus Hook Industrial Complex (MHIC) for distribution to domestic and international markets (interstate) and destinations throughout PA (intrastate). World-Class Northeast NGL Hub at MHIC: Transport, process and market Marcellus/Utica NGLs in PA Prevent these NGLs from being transported to the Gulf Coast Keep opportunities, jobs and spending in PA (not the Gulf Coast) Opportunities at MHIC for additional manufacturing and processing PA Stimulus Economic development: $3 Billion to be spent in PA Thousands of jobs: up to 300 direct, permanent jobs and thousands of direct construction jobs Intrastate PA Propane Availability: Deliveries of propane to MHIC and other points in PA, more propane available to meet winter demand

3 Mariner East Phase 1 Repurposing of an existing 8 pipeline and the construction of a new 12, 51 mile pipeline from Houston, PA to Delmont, PA. Early delivery of propane by end of Upon completion, delivery of Marcellus shale ethane and propane mix from Houston, PA to MHIC and Twin Oaks, PA. All steel, 51 mile pipeline purchased from US Steel and manufactured in McKeesport, PA. 3

4 Mariner East Phase 2 Construction of a new 350 mile pipeline from eastern Ohio, West Virginia and across Pennsylvania that will parallel the Mariner East 1 pipeline/right-of-way. Delivery of NGLs from the Marcellus and Utica regions to the MHIC and other delivery points in PA. A significant step in adding the infrastructure the region needs to fully capitalize on the natural gas industry to spur a manufacturing renaissance. 4

Marcus Hook Industrial Complex (MHIC) Revitalize former refinery into worldclass NGL Hub, located in the Northeast, to compete with hubs in the Gulf Coast.

5 Marcus Hook Industrial Complex (MHIC) Revitalize former refinery into worldclass NGL Hub, located in the Northeast, to compete with hubs in the Gulf Coast. Construct processing units, including ethane/propane splitter, ethane and propane chilling and refrigerated storage. Actively exploring Propane cracker and manufacturing complex 5

6 Proposed Propane Manufacturing Complex Direct access to low-cost feedstock, e.g. propane from the Marcellus and Utica Shales, via Mariner East Advantaged propane pricing allows for the production of propylene that provides local, domestic and international sales opportunities Marcus Hook Industrial Complex is optimized to support producers, processors, as well as global markets for NGLs, as well as propylene and other products. Marcus Hook PDH has very high interest from local clients and has ability to integrate related projects and process improvements on the 800-acre site.

7 Myth vs Fact Myth: Sunoco Pipeline is not a public utility corporation Fact: We are and have been since 2002 a public utility corporation: regulated by the PUC (See, PUC docket #A ). has current, valid Certificates of Public Convenience. transports products intrastate in PA via numerous posted PUC tariffs. one of eight entities currently regulated by the PUC as a pipeline public utility1. exempt from registration under Act 127 because of its public utility status pays the annual PA Public Utility Realty Tax Assessment 7 pays the annual PA Public Utility Gross Receipts Tax 1.See Application of Laser Northeast Gather Company, LLC for Approval to Begin to Offer, Render, Furnish, or Supply Natural Gas Gathering and Transporting or Conveying Service by Pipeline to the Public in Certain Townships of Susquehanna County, Pennsylvania, Concurring Statement of Vice Chairman John F. Coleman, Jr., Docket No. A (May 19, 2011) and Dissenting Statement of Commissioner James H. Cawley (May 19, 2011). 7

8 Myth vs Fact Myth: Sunoco Pipeline doesn t want to work with townships Fact: We strive to work cooperatively with all townships and residents on all of our projects, including the Mariner East project: We live in the communities in which our projects are located and we aim to be a good corporate community partner. We have been successful in working with townships on Mariner East 50% of the PA townships have already approved pump stations for the project. 8

9 Myth vs Fact Myth: Sunoco Pipeline is attempting to gain eminent domain authority Fact: We respect landowner rights and take those rights seriously: While eminent domain authority is derived from our status as a public utility corporation, we appreciate the enormity of such authority, and we exercise this authority, if at all, in very limited cases, cautiously, and only as a last resort when negotiations with a landowner fail and can impede the successful completion of the project. 9

10 Proposed Pipeline Route 10

Materials Sunoco Pipeline has developed various education materials that can be utilized for resident and commercial education needs.

Actuator A device designed to shut off the flow of gas upon operational failure without a person being physically at the location.

(more) B Barrel Measurement used for natural gas liquids (NGLs) and crude oil. 1 barrel =42 U.S.

11 Materials Sunoco Pipeline has developed various education materials that can be utilized for resident and commercial education needs. Glossary of Terms A Abandoned pipeline A pipeline that is physically separated from its source of gas and is no longer operating. Actuator A device designed to shut off the flow of gas upon operational failure without a person being physically at the location. API American Petroleum Institute (more) Association of Oil Pipelines (AOPL) An industry-wide safety initiative reflecting the shared values and commitment of pipeline operators to safe pipelines. (more) B Barrel Measurement used for natural gas liquids (NGLs) and crude oil. 1 barrel =42 U.S. gallons Backfilling The technique for covering a completed pipeline so that adequate fill material is provided underneath the pipe as well as above it. Backfilling prevents pipe damage due to loose rock, abrasion, shifting and washouts. Butane A natural gas liquid that is used in lighters, as a refrigerant in household refrigerators and freezers, and aerosol sprays. C Cathodic Protection A technique used to prevent corrosion of pipelines. All of SXL s newly constructed pipelines are protected by a coating supplemented with cathodic protection. Common Carrier 11

crude oil; refined products such as gasoline, diesel and jet fuel; natural gas liquids, such as propane, ethane and butane.

crude oil; refined products such as gasoline, diesel and jet fuel; natural gas liquids, such as propane, ethane and butane. ABOUT SUNOCO LOGISTICS AND THE MARINER EAST PROJECT Q: Who is Sunoco Logistics and Sunoco Pipeline? A: Sunoco Logistics Partners L.P. (SXL) is a publicly traded partnership that owns pipelines, terminals