New York May 6 Sunoco Logistics Partners LP
said on Monday Royal Dutch Shell Plc's trading
unit has joined its Mariner South project to transport propane
and butane to an export hub in the U.S Gulf Coast, joining a
trend of shipping the fuel abroad.
The project will take liquefied petroleum gases (LPG) from a
storage complex run by Lone Star in Mont Belvieu, Texas, via
Sunoco's existing pipeline to its terminal in Nederland, Texas,
which has round-the-clock access to vessels in the Gulf Coast.
STUSCO, Shell's petroleum trading arm in the United States,
has committed to becoming an anchor customer of the project,
allowing it to go ahead, Sunoco and Lone Star said in a joint
"The development of this world class Gulf Coast LPG
operation is in response to continued growth in North American
NGL (natural gas liquids) production and international demand
for LPG supplies," said Steve Spaulding, executive vice
president of Lone Star NGL.
Production of LPG such as propane has surged in recent years
alongside the U.S. shale oil boom which extracts a sweeter form
of crude oil prone to producing lighter refined products.
Used primarily for heating and cooking, demand rises for
propane during the winter months.
Exports of propane and propylene have quadrupled in the past
five years, according to U.S. Energy Information Administration
data, reaching an all-time high last November.
Sunoco and Lone Star's plan mirrors that of Enterprise
Product Partners' LP project to expand export facilities
on the Houston Ship Channel that take LPGs from Enterprise's
storage and fractioning complex, also in Mont Belvieu.
Enterprise finished the project in March, expanding its LPG
export capacity to 7.5 million barrels a month from 4 million
barrels. Capacity of the Mariner South project is expected to be
6 million barrels per month.
Mariner South is expected to begin operations in the first
quarter of 2015. At the Mont Belvieu storage and fractionation
complex, Lone Star will build a 100,000 barrel per day (bpd)
de-ethanizer to convert propane to international specifications.
The LPGs will then be shipped on a 200,000 bpd pipeline to
the Nederland terminal. There, refrigerated storage tanks will
be built. The terminal will have a load rate of up to 30,000 bpd
an hour to vessels that can carry up to 550,000 barrels.
EIA data showed average monthly exports of propane and
propylene amounted to 184,000 bpd in February and 168,000 bpd in
January after hitting the November peak of 233,000 bpd.
It was unclear how many barrels of propane a day will
actually be exported under the Mariner South project.
"In addition to export grade propane and butane, the
pipeline will be available for other natural gas liquids and
petroleum products depending on shipper interest," the statement
said, adding its capacity could be scaled up.
Lone Star NGL LCC is a joint venture between Energy Transfer
Partners LP and Regency Energy Partners LP. It
operates 47 million barrels of storage capacity at Mont Belvieu
as well as natural gas liquids pipelines.