The company tells OPIS that it has secured a full capital commitment from a private equity partner to develop the hub and is in the midst of assessing customer capacity interest and generating letters of intent.

The hub, slated to open commercial operations in the first quarter of 2016, will offer storage capacity and midstream services for ethane, propane, butane, pentane, y-grade, ethylene, propylene and crude oil. In addition to strategic pipeline interconnects, the project will include large-scale truck and rail logistics.

Gulf Shores intends to build interconnecting pipelines linking to Shell and Dow ethylene lines north of the planned hub, and to two Crosstex Energy pipelines: the Cajun-Sibon, which brings raw mix south from Mt. Belvieu, and an RGB line north of the hub. Also planned is a state-of-the-art truck-loading and off-loading facility and interconnections to a Union Pacific rail line. For crude oil, Gulf Shores will establish connections to Shell’s Houston-to-Houma (Ho-Ho) crude pipeline.

The hub will serve industrial and commercial types including end-user petrochemical plants on the Mississippi River, suppliers and logistical marketing companies that move supply locally.

“Due to incredible growth and expansion in shale gas exploration, the surge of natural gas liquids is bringing new opportunities for downstream energy businesses to grow,” says Gulf Shores Midstream’s chief executive officer David Branch. “The Iberia Storage Hub, which is the benchmark of our development projects, is designed to meet the critical needs of customers seeking to optimize their operational storage demand.”

The hub will consist of a number of individual caverns for storing various hydrocarbons. A crude storage cavern would typically be much larger than a cavern for ethane or ethylene. Gulf Shores also touts a good brine management program. Brine, a mixture of salt and water, is injected into caverns to drive stored gas or liquid to the surface. A good brine management program is important because it helps to optimize a salt dome storage facility’s working storage capacity and is critical in the injection and withdrawal of products as demanded by customers, said Gulf Shores.

Gulf Shores is currently seeking market-based term contracts. Typical contracts may range from three to 10 years.

A meaningful expansion of liquid hydrocarbon capacity at the Gulf Coast has not occurred in several decades. The most difficult part of developing a major salt dome storage cavern project can be accruing the land positions, say sources.

Gulf Shores is currently at the beginning of the permitting process with its storage project. The firm is seeking permits from the Louisiana Department of Natural Resources.

Gulf Shores’ management team includes Branch, the CEO; John Sutton, president, whose expertise is engineering; and long-time NGL trader Rahim Baig, the firm’s vice president of Commercial. The firm has declined to release the name of its equity partner.