Energy Transfer Partners LP (NYSE: ETP) plans to build a pipeline to transport natural gas from processing facilities located in the prolific Marcellus and Utica shale areas to numerous market regions in the US and Canada. In conjunction with this announcement, ETP has signed long-term agreements with multiple shippers and is launching a binding open season.
The natural gas pipeline is sized to transport 2.2 billion cubic feet per day, however, depending on additional shipper commitments, the project likely will be expanded to transport up to 3.25 billion cubic feet per day. ETP has secured capacity commitments from producers who hold significant acreage positions in the Utica and Marcellus shale plays and has been in negotiations with numerous other shippers who have expressed a desire to contract for capacity in the open season.
The three largest shippers on the project are American Energy – Utica, LLC (AEU), Antero Resources Corp. (NYSE:AR), and Range Resources Corp. (NYSE:RRC). American Energy and Antero Resources both have options to purchase non-operating equity interests in the project.
The first 400 miles of the project will enable the flow of gas from processing plants and interconnections in Pennsylvania, West Virginia, and Ohio to points of interconnection with Energy Transfer’s existing Panhandle Eastern Pipe Line (PEPL) and another Midwest pipeline near Defiance, Ohio. Shippers in the ET Rover project also will be able to transport to Trunkline Zone 1A, delivery points via the interconnection with PEPL, to access existing and new industrial markets and potential liquefaction export markets in the Gulf Coast.
Additionally, ETP expects to construct a 195-mile segment from the Defiance area through Michigan and ultimately to the Union Gas Dawn Hub (Dawn) near Sarnia, Canada, providing producers with access to diverse markets and end-users in Michigan and Canada with access to Marcellus and Utica supplies. Energy Transfer has received sufficient commitments and board approval to build the pipeline to Defiance and anticipates receiving sufficient volumes to justify building to Dawn.