Houston-based midstream company Kinder Morgan Energy Partners announced it has received a long-term transportation agreement from Nova Chemicals Corp. to ship ethane and ethane-propane mixtures from the Utica Shale through its $500-million Utica To Ontario Pipeline Access (UTOPIA) project.
The deal, the company said, means the project can advance, although more capacity remains available.
The UTOPIA system is currently in a binding open season for shippers to reserve capacity. The open season began Sept. 5 and will close Oct. 6, according to Kinder Morgan.
Nova Chemicals is headquartered in Alberta, Canada, but has operations in Moon Township.
“This pipeline project supports Nova Chemicals’ growth strategy — providing our Corunna, Ontario, facility with diversity of supply by accessing feedstock from new and existing producers in the growing Utica shale basin, in addition to our current feedstock supply,” said Grant Thomson, president of olefins and feedstocks for Nova Chemicals, in a statement.
As part of the project, Kinder Morgan Cochin will build a 240-mile, 12-inch diameter pipeline from Harrison County, Ohio, to Kinder Morgan’s Cochin Pipeline near Riga, Michigan, where the company plans to move product eastward to Windsor, Ontario.
UTOPIA, expected to be in service by 2018, would have an initial 50,000 barrels per day (b/d) of capacity and have the capacity for expansion to more than 75,000 b/d.
“Although we will continue to solicit additional volume commitments, this transportation agreement provides the necessary commitment level required to move forward with the project, and that is exciting news for the growing Ontario market,” said Don Lindley, president of natural gas liquids, products pipelines for KMP, in a statement.
This article was written by Stephanie Ritenbaugh from Pittsburgh Post-Gazette and was legally licensed through the NewsCred publisher network.