What’s Ahead for Energy Transfer’s Mariner East 2 Project?



The project

Energy Transfer’s (ET) Mariner East system transports Marcellus and Utica NGLs (natural gas liquids) to Pennsylvania, where they are processed and transported to markets. The system has three parts—Mariner East 1, Mariner East 2, and Mariner East 2X. Mariner East 1 has been in service since 2014, and Mariner East 2 started operations in December. It transports NGLs from processing plants in Ohio to Energy Transfer’s Marcus Hook industrial complex in Pennsylvania. Mariner East 2X parallels Mariner East 2 and is expected to be in service later this year.

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The issue

Unlike other pipeline controversies, Mariner East 2’s issue has more to do with Energy Transfer’s track record than with the pipeline’s path or operations. The Pennsylvania DEP (Department of Environmental Protection) halted reviewing all of Energy Transfer’s permit applications. According to the DEP, the company failed to comply with permit obligations for its Revolution pipeline, and has continued to violate permits. The DEP’s action may impact Mariner East 2X’s in-service date.

What’s next

Notably, 99% of Mariner East 2X’s mainline construction is complete. “It’s a matter now of completing the HDDs and some open cut. There are roughly 20 permit modifications required to convert from HDDs to open cut,” noted Energy Transfer CFO Tom Long, during the company’s fourth-quarter earnings call. “And as I say, we’re still committed to completing 2X by the end of 2019,” added Long.

Energy Transfer stock has risen 18% this year but has fallen 7% in the last year. It’s currently trading 10% above its 50-day moving average and 4% below its 200-day moving average. Next, let’s look at the status of TransCanada’s (TRP) Keystone XL project.


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