Spectra joins El Paso in Marcellus ethane pipeline

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, Oct. 28 -- El Paso Corp. subsidiary El Paso Midstream Group Inc. and Spectra Energy Corp. signed a memorandum of understanding to develop jointly the proposed Marcellus Ethane Pipeline System project previously announced by El Paso.

MEPS will transport as much as 60,000 b/d of ethane from fractionation plants in the ethane-rich Marcellus shale production region to interconnect points with third-party ethane pipelines and storage facilities in the Gulf Coast.

The agreement allows MEPS to use both existing rights-of-way and infrastructure of Spectra 's Texas Eastern pipeline system in Pennsylvania and Ohio and portions of El Paso's Tennessee Gas Pipeline system from Ohio to the Gulf Coast.

In addition to existing ROW, the MEPS project will primarily use existing facilities and utility corridors, with new construction including about 200 miles of pipeline and compression facilities, as well as vaporization and liquefaction facilities. MEPS is expected to be in service late-2013.

MEPS has a binding open season planned, with its schedule still to be determined. El Paso said the project is in discussions with interested parties and is jointly reviewing options for the project and various destination points. El Paso also says the deal will provide greater efficiencies for the market and participants, enhanced economics, and more favorable shipping rates.

El Paso Midstream and Spectra will hold equal interest in, and jointly operate MEPS. Spectra will operate its portion of MEPS, where Spectra ROW is used, and El Paso will operate its portion.

Contact Christopher E. Smith at chriss@ogjonline.com.

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