Utica shale oil is in Ohio gasoline, new pipeline to feed Marathon's Canton refinery (photos)

CANTON -- Marathon Petroleum's 85-year-old refinery is once more using Ohio crude oil to make gasoline for motorists here and around the state.

The clear light oils -- known as "condensates" because they can be condensed out of  natural gas  -- are not like the Ohio oils the plant began refining when it opened in 1931.

And they are not like the various crude oils the refinery has been using in recent years, none of it from old Ohio vertical wells.

For one thing, the condensates are naturally very low in sulfur, an element federal regulators want taken out of fuels. Condensates also don't cost as much as other crude oils. And they contain a low-octane gasoline, even before they are refined.

The light oils are coming from Utica shale wells in Southeast Ohio.

Marathon built special equipment at the Canton refinery two years ago to split natural gasoline from the Utica condensate before mixing it with heavier crude oils it receives through an interstate pipeline system from other regions, including the Gulf Coast and Canada.

Other plant upgrades at Canton, including a state-of-the art computerized operations center, have increased the refinery's capacity and safety.  It can now refine 93,000 barrels of crude every day, said Brad McCain, plant manager. And the refinery operators can monitor and control everything that is going on throughout the refinery from the new operations center adjacent to the complex.

Utica condensate accounts for 25,000 barrels of the 93,000 barrels the plant can run daily, said McCain.

For the last two years Marathon has been using tanker trucks to ship all that condensate to Canton from a raw gas processing plant operated by MarkWest Energy Partners in Cadiz, located in Harrison County.

MarkWest cleans and separates the condensate from methane and other gases such as ethane and butane before sending it to nearby storage tanks operated by another company, Midwest Terminals. From there it has been loaded into tanker trucks that race up to Canton.

The 24-hour-a-day Cadiz-to-Canton run requires 130 tanker truck-loads. That 120-mile round trip is ending.

Marathon's pipeline division, MPLX LP, this past week opened a new 50-mile pipeline to Canton from Cadiz. It began building the line last spring.

The first 42 miles is a 16-inch diameter epoxy coated steel pipe, each of its 40-to-60-foot sections welded together and checked with X-ray equipment.

Buried 4 feet under ground, 40 feet under rivers and major highways and equipped with real-time leak detection, the pipeline runs from Cadiz to a "tank farm" that Marathon owns in East Sparta, 8 miles south of Canton. Much of the 42-mile pipeline runs along existing right-of-way easements.

The 16-inch line is designed to operate at 1,600 pounds per square inch and can deliver 180,000 barrels, or nearly 7.6 million gallons, of condensate a day, to the tank farm.

"We will be nowhere near pushing that capacity in the first year. We have oversized this pipeline, like an insurance policy," said  Jason Stechschulte, a senior engineer with the pipeline division.

Marathon begin pumping the condensate through the pipeline to East Sparta on Thursday morning.

It's doubtful that anyone in East Sparta noticed its arrival at the tank farm.

The pipeline avoids the tiny downtown. The tank farm is tucked into property off a network of quiet residential streets, adjacent to corn fields and thinly forested land. Its huge tanks store gasoline, diesel, jet fuel, and now condensate. All of it is delivered and shipped out by pipeline.

The rest of the new 50-mile pipeline is an 8-inch-diameter pipe  running eight  miles from the tank farm to the refinery.

MPLX was planning to begin pumping the condensate from East Sparta to the refinery after filling a condensate storage tank at the farm. The 8-inch line can move up to 45,000 barrels per day.

Marathon is calling the new pipeline its "Cornerstone Pipeline" because it is the cornerstone of a larger pipeline project that will handle Utica shale gas and oil when prices increase.

That increase depends on global events as well as a fully developed pipeline system to move Utica production out of the region.

Built for about $250 million by a crew of 550, Cornerstone is the first phase in a nearly $1 billion "build-out" of pipelines and storage tanks as well as  rail, truck and barge loading docks that MPLX is constructing in order to to move Utica condensate out of Southeast Ohio and into refineries, said Stechschulte.

"I know pipelines have been in the news quite a bit. When it gets down to it there is no safer way to transport condensate, gasoline, any type of hydrocarbon," said Stechschulte.

"It's going to be much safer in a pipeline than it is in a rail car, in a truck or in a barge.  That said, those are all viable means of transportation. They have been done for many years and Marathon is involved in all of them. The big thing with pipelines, too, is the efficiency. "

Marathon refineries throughout the region will use the condensate, he said. And some of it may be sold to other refiners. Marathon buys the condensate directly from gas and oil producers.

Marathon is the largest refiner in the Midwest, and the third largest nationally. It operates seven refineries, including three on the Gulf Coast, one in Kentucky, one in Illinois and one in Michigan. Canton is Marathon's only Ohio refinery.

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