May 3, 2018 / 3:53 PM / 3 months ago

UPDATE 3-Pennsylvania regulators allow ETP Mariner East 1 liquids pipe to restart

(Adds fine on Mariner East 2 in 8th paragraph)

May 3 (Reuters) - The Pennsylvania Public Utility Commission (PUC) said on Thursday that all five commissioners voted to allow Energy Transfer Partners LP to restart its Sunoco Mariner East 1 natural gas liquids pipeline.

The PUC suspended operations on Mariner East on March 7 after sinkholes were discovered near the project.

After testing the integrity of the pipeline, ETP filed with the PUC on April 27 to restart the pipe. The PUC’s Bureau of Investigations and Enforcement, which recommended the pipe be shut in March, concurred with ETP’s restart request.

“When (Mariner East 1) was shut in as a precautionary measure there were no issues with the pipeline, which has been safely operating for decades. Its continued safe operation has now been verified,” ETP spokeswoman Lisa Dillinger said in an email, noting the company will begin the procedures to restart the pipeline immediately.

The shutdown forced shippers, including U.S. gas producers Range Resources Corp and Antero Resources Corp, to find another route for their liquids and is likely causing more ethane to be injected into the region’s natural gas pipelines, according to analysts.

Mariner East 1, which started service in the 1930s transporting refined products from the Philadelphia area to western Pennsylvania, was repurposed and expanded to transport propane in 2014 and ethane in 2016 from western Pennsylvania shale fields to customers in the state and elsewhere, including international exports from ETP’s Marcus Hook complex near Philadelphia.

Separately, ETP is building the $2.5 billion Mariner East 2 pipeline, which will boost total capacity of the Mariner East project from 70,000 barrels per day (bpd) to 345,000 bpd and open the pipe to suppliers in Ohio and West Virginia.

On Thursday, Pennsylvania environmental regulators said they levied a $355,622 penalty on Mariner East 2 for violations of the Clean Streams Law that occurred between May 3, 2017 and Feb. 27, 2018. That penalty is in addition to the $12.6 million penalty levied against the company in February for separate violations.

Since May 2017, Mariner East 2 has received 51 notices of violation from Pennsylvania regulators due in part to inadvertent returns or spills.

Delays related to those spills, among other things, have pushed the expected startup of Mariner East 2 from the third quarter of 2017 to the end of the second quarter of 2018. Some analysts, however, have said they do not expect Mariner East 2 to enter service until the third quarter.

Reporting by Scott DiSavino; editing by Tom Brown and Chizu Nomiyama

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