A fleet of eight ships is being used to transport Pennsylvania natural gas liquids (NGLs, mostly ethane) to Europe, where the ethane is turned into plastic. The ethane is flowing through Mariner East 1 (ME1), the repurposed gasoline and fuel-oil pipeline that Sunoco/ETP owns. The ships are unique, specifically designed for ethane transportation. The company that had them built calls them “Dragon class ships”; I just call them dragonships. The home page of this blog has more information about the name’s origin.

Why exactly eight ships? Each of these ships costs hundreds of millions of dollars, so the decision to build eight of them (rather than six or ten) was not taken lightly. Trying to understand that decision may teach us something about Sunoco/ETPs plans for the Dragonpipe (the Mariner East 2 pipeline).

Together, the eight ships can be thought of as a type of “pipeline”, designed to provide a steady flow of ethane from the Marcus Hook terminal on the Delaware River to petrochemical plants in Scotland and Norway. I was curious to learn how big this trans-oceanic “pipeline” might be. How does its capacity compare with the capacity of the original 8-inch ME1 pipeline, or with either of the two pipelines comprising the Dragonpipe?

The dragonships are the equivalent of ME1. Each of the dragonships has a capacity of 27,500 cubic meters of ethane. My calculations suggest that the dragonship fleet is the right size to handle the flow of ME1, but it could not possibly handle the volume of the Dragonpipe.

Here is an outline of my calculations. The ME1 can transport about 70,000 barrels of ethane per day. That translates to roughly 11,000 cubic meters. At that rate of flow, it takes 2.5 days to fill a dragonshp. To fill all eight ships in a row would take 20 days.

20 days is also approximately the time required for a ship to sail to Europe, unload, and sail back. So the first ship could return from Europe at about the same time as the eighth one sailed off. If this calculation is right (and I encourage corrections from anyone with better information), the transatlantic pipeline provided by the dragonships is the same size as the ME1 pipeline.

So what happens to the ethane from the Dragonpipe? When I realized that the eight dragonships could only handle the ethane from the ME1 pipeline, I became curious about the fate of the ethane that the Dragonpipe will carry. The first of the Dragonpipe’s two pipes (20” diameter) will have an initial capacity of 4 times the ME1, expandable up to 6.5 times the ME1. When the second pipe (16” diameter) is added, the total capacity will be 10 times the capacity of the ME1. Where will that ethane go?

It’s unlikely that Sunoco/ETP will obtain 80 additional dragonships. Since the dragonships were built, construction has begun, mostly in China, on a handful of larger ethane carriers. Some of the largest ones are 2-3 times the size of the dragonships. But Sunoco/ETP won’t own them, and it is unclear how many of them Sunoco/ETP could get leases on to transport Dragonpipe output—other companies are moving into the ethane-transporting business, and ETP itself has ethane in Texas that it may need to export. The size of the Marcus Hook port facilities also places a limit on the number of ships that could be filled simultaneously. My conclusion: only a fraction of the Dragonpipe ethane could be transported on ships in the foreseeable future.

It’s also possible that Sunoco/ETP would close down ME1 (which is a very old pipeline) and just use the Dragonpipe. But that would still result in a flow of ethane that would be several times the capacity of the eight dragonships.

A cracking plant in Marcus Hook? The main market for ethane is the “cracking” process, which removes hydrogen from the ethane to turn it into ethylene which is, in turn, used to make plastics. Cracking plants are vast and dangerous. They cost billions of dollars (one that Shell is building south of Pittsburgh will cost over $5 billion) and they take years to build, which is why Sunoco/ETP went to the trouble of leasing the dragonships and building the Dragonpipe to send ethane to Europe (where there is unused cracking capacity), rather than process the ethane here.

But Sunoco/ETP may want to build a cracking plant in Marcus Hook. There was an article in phily.com a couple of years ago that alluded to a cracking-plant plan, but I haven’t turned up anything more recent. (Readers, please let me know if you know more about this.) The ethane could also go to Shell’s plant, once built; or they could go into ethane pipelines that other companies are building from western Pennsylvania to plants along the Gulf of Mexico. But (as of now) Sunoco/ETP does not have a stake in that plant or those pipelines, so presumably they would not want ethane to go there.

Stockpiling ethane in Marcus Hook? For now, it looks possible that the Dragonpipe is just going to take a surplus of ethane from western Pennsylvania and turn it into a surplus of ethane in Marcus Hook. Sunoco owns a vast underground storage cavern under Marcus Hook (left over from strategic fuel storage during the cold war) which could hold many months of ethane production. Perhaps the plan is to store it there until Sunoco/ETP finds a way to make use of it.

But I shudder to think of the potential safety issues associated with storing that vast quantity of highly explosive compressed gas in southern Delaware County.