Sunoco switches strategies for pipeline

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The Sunoco refinery in Marcus Hook, terminal of the proposed Marcellus Shale pipeline.

Sunoco Pipeline L.P. said Tuesday that it was switching strategies in its effort to move Marcellus Shale products to Marcus Hook and avoid local zoning hurdles.

The company said it was withdrawing an application for a controversial pumping station in Chester County on its cross-state pipeline called Mariner East. Instead, Sunoco is concentrating on getting the Pennsylvania Public Utility Commission to rule that it is a public utility corporation and therefore exempt from cumbersome local zoning.

Sunoco Pipeline was scheduled to appear Thursday before the zoning hearing board in West Goshen, where it has applied for a variance to build a pumping station at Boot Road and Route 202, one of 17 pump stations along its 299-mile pipeline project.

"The Public Utility Commission's open hearing process, by law, is the appropriate public venue for approval of buildings related to the pipeline," said Jeffrey Shields, a spokesman for the parent company, Sunoco Logistics Partners L.P.

Sunoco wants to open Mariner East this year to transport Marcellus Shale natural gas liquids such as propane and ethane from Western Pennsylvania to Marcus Hook, whence it would be exported or distributed locally.

The Mariner East project involves repurposing an eight-inch diameter steel pipeline built in 1931 that delivered refined petroleum products from Philadelphia refineries to Western Pennsylvania. Sunoco is repairing the pipeline and installing new pumps and valves along the route.

Sunoco has operated a pump station near the Boot Road site for decades, near a 1959 residential development. But the new project has triggered a backlash from residents concerned about safety of the pump stations.

Local residents jeered Sunoco Pipeline officials last week at a community meeting on the project.

"I don't think they liked the reception they got last week," said Lilli B. Middlebrooks, a lawyer who represents residents in the zoning matter.

Sunoco in March applied for public utility corporation status under the state Municipalities Planning Code, which would exempt it from local zoning.

Sunoco argues that the pipeline's prices were previously regulated by the PUC when it transported refined products such as gasoline and heating oil.

Opponents have argued that Sunoco Pipeline is not a public utility corporation, but a common carrier under federal law.

To buttress the argument that it is a state public utility corporation, Sunoco now says it is amending its Mariner East plan to make intermediate deliveries of propane to local customers at its Twin Oaks terminal in Aston.

That would make the pipeline an intrastate project, subject to PUC tariff review. Shields said the company is making the change based on shipper interest.

"Our petition will point out to the PUC that Sunoco Pipeline is already a public utility corporation, certificated and regulated by the PUC, for intrastate shipment of petroleum products along the Mariner East line," he said.

Sunoco also filed notice Monday with the PUC that it had retained the Blank Rome L.L.P. law firm to represent it before the PUC. The Blank Rome team is headed by Michael L. Krancer, Gov. Corbett's former secretary of environmental protection.


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