Sunoco Logistics Partners is pursuing state approval for the construction of cryogenic tanks capable of storing approximately 2.4 million barrels of natural gas liquids (NGL) outside of Philadelphia, Pennsylvania, according to a report by Reuters.
According to a filing the company submitted to the Pennsylvania Department of Environmental Protection in September, the tanks will hold 300,000 barrels of ethane, 600,000 barrels of butane, and 1.5 million barrels of propane. It’s the latest move the company has made to turn the region into a manufacturing and export hub.
Sunoco officials discussed the construction of the storage tanks when they announced its $2.5 billion pipeline project called the Mariner East 2. The transmission line will move 275,000 barrels of natural gas liquids per day from Western Pennsylvania, Virginia and Ohio to its facility outside Philadelphia. The facility will be located at the 800-acre site of a former refinery.
Analysts speculate that Sunoco is attempting to take advantage of an expanding export market. The company may also be trying to create an alternative storage facility to the national NGL storage facility in Mount Belview, Texas, as well as to better position itself in the local natural gas market.
Jarrett Renshaw reports that ESAI Energy Senior Analyst Vivek Mathur said, “Sunoco is basically trying to capture the international market, particularly in the northeast and northwest Europe … If you’re a Marcellus producer and you have an option to move product to the Gulf Coast or through the Mariner East, it makes economic sense to choose Mariner East.”
The facility will cool, store and process NGLs to cater to regional demand. The facility will also position the company to enter an export market which the Energy Information Administration says will grow exponentially over the next twenty years. Construction of the storage facility is anticipated to begin after the permitting process is complete.
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