March 22, 2013 [OPIS] - Sunoco Logistics is expected to close a deal to purchase a plot of land adjacent to its Nederland petroleum terminal in Texas from the City of Nederland, according to industry sources.
The 259-acre plot will be priced at $1.45 million, they said, noting that the deal has been in the works since last November.
Sources said it would be a matter of days before the deal is concluded, and that all parties involved in the deal were committed to the transaction.
According to sources, this land plot would figure into a joint-venture project by Sunoco and Energy Transfer Partners’ Lone Star NGL to build an NGL (natural gas liquids) export facility. Sunoco announced this export project in February.
The companies involved are also close to securing a term contract to provide such NGL export services, the sources said, noting that usually that would be the case for such projects.
Sunoco officials said in their February earnings call that they would have to build tankage in Nederland to support those NGL exports. The Mariner South facility, as the export project would be known, is to handle mainly propane and some butane. According to market sources, the Mariner South facility could have a much larger offloading rate compared with existing LPG export facilities.
ETP said in its February earnings call that it would use Sunoco’s pipelines and refrigerated facility, storage facilities at Nederland and also their export capabilities from that facility.
The fee-based export facility would originate at Lone Star’s fractionator complex at Mt. Belvieu, Texas, and will be available from early 2015, the company said. A repurposed existing Sunoco pipeline will transport the NGLs to the Nederland terminal for export, the sources said.
Today, Sunoco announced that it has begun an open season for this line which would have an initial capacity of some 200,000 b/d. The pipeline is expected to be operational by the first quarter of 2015, and would have extensions to Lone Star’s facilities near Mt. Belvieu.
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.
According to some sources, the City of Nederland still has some 700 acres of land it is keen on selling and there have been interested parties. These tracts are along the Sabine Neches River.Sunoco spokesman did not respond to calls/e-mail seeking comment. An ETP spokesman could not be reached for comment.
