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County Council presents 127-page reuse study for Sunoco complex

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Published on Jun 28, 2012

Seven potential uses, including a gas-to-liquids facility and a natural gas export facility, were touted by a new study as positive reuse options for Sunoco's 781-acre industrial complex in Marcus Hook. Some of these options are now possible due to the growth of the U.S. shale oil and gas industry.
The 127-page report details seven key energy- and chemical-related reuse options that best maximize the complex's vast infrastructure, and the report suggests that the site could support multiple uses, resulting in jobs and capital investment.
The Sunoco Marcus Hook Industrial Complex Economic Opportunity Reuse Study was prepared by IHS for the Delaware County Industrial Development Authority (IDA) at the request of County Council. The IDA contracted with IHS in May.
Delaware County Council presented the final study to the major stakeholders in the region at a meeting at the Marcus Hook Community Center on June 27. Stakeholders include Marcus Hook and Lower Chichester officials, federal and state elected leaders, Sunoco officials, union representatives, commerce and workforce development leaders and members of the Industrial Development Authority, which funded the $100,000 study.
"We are encouraged by the strong potential uses detailed in this study," said Delaware County Councilman Tom McGarrigle. "We know there is global interest in the energy marketplace and we want our county to be positioned to take advantage of this growing market. We hope that this study provides a vision for potential investors who could repurpose some or all of the refinery site for uses that take into account future market conditions and the future of energy production."
The 781-acre industrial complex is owned by Sunoco, which idled the Marcus Hook refinery in December, 2011. In April, Energy Transfer Partners (ETP), a Texas-based natural gas company, entered into a definitive merger agreement with Sunoco in a deal worth $5.3 billion. Once the transaction is finalized later this year, ETP will represent one of the largest energy partnerships in the country with a major presence in the transportation, terminaling and logistics of crude oil, natural gas and refined products.
"We are hopeful that Sunoco and Energy Transfer Partners will utilize this study as they consider the future of the Marcus Hook property. We have chosen to be proactive here. In this study, the experts at IHS have identified the markets, and they suggest that the growth in the shale oil and gas market make these options more viable," Chairman McGarrigle said.
The study was prepared by IHS, a Colorado-based company that has global experts in the field of energy, economics, sustainability and supply-chain management. They also have a local presence with regional offices at the Baldwin Tower in Eddystone.
"We identified several possible reuse options for the Marcus Hook facility, and what is interesting is that most of these opportunities are possible as a result of the recent phenomenal growth of the U.S. shale oil and gas market," said Joseph Waldo, director of state and local government consulting for IHS Global, who presented the study results to the stakeholders.
"These options could potentially provide an economic second life to the complex," he said.
The seven potential uses fall into two categories: potential energy-product based reuse and potential chemical-product reuse.
These reuses are evaluated in terms of job creation potential. The study indicates that jobs would increase substantially if the facility could operate two reuse options concurrently.
The seven reuse options are: propane dehydrogenation, natural gas liquids (NGL) processing facility, refined petroleum products storage, natural gas power generation, ethane cracking and derivatives, liquefied natural gas export terminal and gas-to-liquids productivity and storage.
"All seven reuse options show promise," Waldo told the stakeholders. "In addition to any direct employment potential linked to reuse options, a repurposed industrial complex would also generate indirect job opportunities as a result of the capital investment necessary to develop the options."
He also said that a multi-purpose approach is not only feasible; it would widen the job creation potential.
McGarrigle said the study will now be shared with all stakeholders in an effort to attract interest in the refinery property. He said County Council and the staff of the Delaware County Commerce Center, headed by Patrick Killian, continue to be in discussions with Marcus Hook officials, federal and state leaders, labor union representatives and Sunoco officials.
"In Delaware County, we don't sit back and take a wait-and-see approach. We are proactive and this study is one way of creating a vision and then trying to make that vision become reality," he said. "Everybody's fear was that this property could only be used as a port. This report shows that there are many viable uses that can be done safely and successfully."

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