New York, May 6 (Reuters) - Sunoco Logistics Partners LP said on Monday Royal Dutch Shell Plc's tradingunit has joined its Mariner South project to transport propaneand butane to an export hub in the U.S Gulf Coast, joining atrend of shipping the fuel abroad.
The project will take liquefied petroleum gases (LPG) from astorage complex run by Lone Star in Mont Belvieu, Texas, viaSunoco'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 jointstatement.
"The development of this world class Gulf Coast LPGoperation is in response to continued growth in North AmericanNGL (natural gas liquids) production and international demandfor LPG supplies," said Steve Spaulding, executive vicepresident of Lone Star NGL.
Production of LPG such as propane has surged in recent yearsalongside the U.S. shale oil boom which extracts a sweeter formof crude oil prone to producing lighter refined products.
Used primarily for heating and cooking, demand rises forpropane during the winter months.
Exports of propane and propylene have quadrupled in the pastfive years, according to U.S. Energy Information Administrationdata, reaching an all-time high last November.
Sunoco and Lone Star's plan mirrors that of EnterpriseProduct Partners' LP project to expand export facilitieson the Houston Ship Channel that take LPGs from Enterprise'sstorage and fractioning complex, also in Mont Belvieu.
Enterprise finished the project in March, expanding its LPGexport capacity to 7.5 million barrels a month from 4 millionbarrels. Capacity of the Mariner South project is expected to be6 million barrels per month.
Mariner South is expected to begin operations in the firstquarter of 2015. At the Mont Belvieu storage and fractionationcomplex, 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 tothe Nederland terminal. There, refrigerated storage tanks willbe built. The terminal will have a load rate of up to 30,000 bpdan hour to vessels that can carry up to 550,000 barrels.
EIA data showed average monthly exports of propane andpropylene amounted to 184,000 bpd in February and 168,000 bpd inJanuary after hitting the November peak of 233,000 bpd.
It was unclear how many barrels of propane a day willactually be exported under the Mariner South project.
"In addition to export grade propane and butane, thepipeline will be available for other natural gas liquids andpetroleum products depending on shipper interest," the statementsaid, adding its capacity could be scaled up.
Lone Star NGL LCC is a joint venture between Energy TransferPartners LP and Regency Energy Partners LP. Itoperates 47 million barrels of storage capacity at Mont Belvieuas well as natural gas liquids pipelines.
