Houston, 27 February (Argus) — Japanese trading house Itochu is joining European trading firm Vitol on a proposed LPG export terminal near Beaumont, Texas.
Vitol already owns the Coastal Caverns storage facility on the Spindletop Dome at Beaumont, which has acquired permits for up to 30mn bl of liquids storage capacity, the company said. It had proposed a propane export terminal at the site in 2011 amid growing supplies of US propane, but has not disclosed any further developments until today.
Itochu said it will take a 34pc stake in the project, with it planning to market the LPG exports predominantly to Asia-Pacific. A final investment decision on the project will be made in June this year.
The first phase of the project will cost $500mn and will include a 100,000 b/d de-ethanizer that will strip ethane from the propane, Vitol said today. The facility will have the capacity to treat and export more than 3mn t/yr of LPG, or roughly 3mn bl/month, with capacity able to be expanded to export more than 6mn t/yr. The Beaumont export facility may be completed by the fourth quarter of 2014.
“By working together on this facility, Itochu and Vitol provide sufficient capacity commitments and equity support for the project to move forward,” Vitol's North American president Mike Loya said. Vitol did not specify the source of the propane for export.
The development is the latest in a series of LPG export terminal projects in the US, where an oversupply of propane has lowered prices and widened the differentials between the US and other markets, particularly in Asia-Pacific. This week the differential between propane in Asia-Pacific and the US stood at roughly $452/t, according to Argus data.
Enterprise Products Partners' LPG terminal expansion on the Houston Ship Channel is scheduled to come on line at the start of March. Targa Resources Partners, which operates a nearby export terminal at Galena Park, Texas, is also boosting export capacity. Expansion of Targa and Enterprise's terminals alone will increase US exports to as much as 12mn bl/month of propane.
Sunoco Logistics and Lone Star NGLs last week announced a joint venture to construct another LPG export terminal at Nederland, Texas. This will be supplied from the Lone Star storage terminal at Mont Belvieu, Texas, tentatively scheduled for completion in 2015.
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