Sunoco passes on East Coast pipeline [Oil & Gas News]

Sunoco Logistics will pass on using some of its legacy pipeline to move crude oil to the East Coast from the Midwest and hold its focus on moving natural gas liquids, but it could revisit the issue later, the company said. East Coast refineries the largest of which is still owned by Sunoco have lower profit margins than US refineries in other regions because they pay higher prices for the crude feedstock they can process, historically importing virtually all of the feedstock from the more expensive North Sea and West Africa.

Speaking to analysts at a second quarter analyst meeting, Sunoco Logistics said it still thinks the best use for its pipeline is for natural gas liquids and refined products. "Our first priority has been on NGLs, and that's why you saw Mariner West and East developed as projects on our existing assets," said a company spokesman, referring to the pipelines to move natural gas liquids (NGLs) like ethane and propane from the Marcellus shale area in northern Pennsylvania into the Canadian oil and chemical hub of Sarnia, Ontario, across the border from Michigan. The rapid growth of crude oil shale plays in the US, like the Bakken in North Dakota, the Eagle Ford in Texas and the Utica in Ohio, has far outstripped infrastructure capability including any pipeline which carries crude from the US midcontinent to the East Coast refineries.