In response to questions over the future of Coastal Caverns, spokesman Donald Goldberg said the Vitol subsidiary in charge of the site “has canceled development of the planned LPG export facility in Beaumont, Texas, due to execution risks associated with the project.”

Instead, Vitol will secure long-term LPG supply through an off-take agreement with an affiliate of Enterprise Products Partners LP for up to 72 cargoes per year. Goldberg added that “this association will enable Vitol to remain one of the largest global marketers of LPG.”

A spokesman for Enterprise was unable to confirm when the term contract would begin. Some portion of it, though, will be supplied out of Enterprise’s just-announced second LPG export facility along the Gulf Coast.

In March, Coastal Caverns Inc. said it had entered a joint development deal with Japanese trading firm Itochu to develop the site.

Market sources have speculated that the cost of developing the site proved too high for Itochu to continue its involvement. In its initial announcement regarding the project, Coastal Caverns and Itochu put a $500 million price tag on developing the site, which at this point consists largely of two storage wells.

Market sources said the lack of ancillary infrastructure such as pipeline connections to Mont Belvieu, refrigeration equipment and a dock was a big roadblock for the project.

When Vitol released word of its final investment decision in July regarding the project, it put a capital budget range of $500 million to $600 million on the project.

The facility was also expected to take longer than its original startup target date of early 2015.

Itochu is said to have reduced its ownership in the project from 34% to approximately 6% due to the higher capital costs and delayed timing. An Itochu representative was unavailable to comment by presstime.

Vitol’s Goldberg was unable to comment on Itochu’s equity stake in the project. He added that Vitol has no immediate plans to sell the facility.