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Marathon Petroleum: Key growth projects

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Sandpiper pipeline

Marathon Petroleum Corporation (MPC) recently announced an agreement with Enbridge Energy Partners, L.P. (EEP) to serve as an anchor shipper on its Sandpiper Pipeline that will run from Beaver Lodge, North Dakota, to Superior, Wisconsin.

The pipeline would have a capacity of 580 million barrels per day. It’s expected to be in service by 1Q2016. According to a company presentation, MPC’s equity in the pipeline would be 27%–30% and the pipeline could be a potential dropdown to MPLX LP (MPLX).

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Southern Access Extension Pipeline

MPC also recently announced an agreement with Enbridge Inc. USA (ENB) to serve as the anchor shipper on the proposed Southern Access Extension Pipeline.

The 165-mile pipeline will have a capacity of 300 million barrels per day and is expected to be in service by mid-2015. The pipeline will extend from Flanagan to Patoka, which is a key supply hub for MPC. MPC’s interest in the pipeline is slated to be 35%, and the pipeline itself could be a potential dropdown to MPLX, according to a company presentation.

These key MPC projects will mean that MPLX will have to participate and pursue activities related to these projects. According to President Pam Beall, “anywhere that MPC has an interest in accessing attractively priced crude oil or condensate those would be high priorities for MPLX. And we’re actively pursuing opportunities around those plays.”

Key ETFs

MPLX LP is a component of the Global X MLP & Energy Infrastructure ETF (MLPX). Its parent company, MPC, is a component of the Energy Select Sector SPDR Fund (XLE). 

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