March 6 (Reuters) - Oiltanking Partners LP, an oil and gas transporter, will spend $44 million to build a new vessel dock and upgrade existing ones at its terminal on the Houston Ship Channel to meet demand for export of liquefied petroleum gas (LPG).
Pipeline companies Williams Companies Inc and Boardwalk Pipeline Partners LP said on Wednesday they are also exploring development of a new LPG export terminal on the U.S. Gulf Coast.
U.S. propane exports are set to double and match those of Saudi Arabia, the third-largest LPG exporter, by the end of this year, as companies expand capacity to transport surging output from North American shale fields.
Oiltanking said it agreed to provide vessel-based LPG import and export services on the Houston channel exclusively to Enterprise Products Partners LP, one of its top customers along with BP Plc and Exxon Mobil Corp.
The deal with Enterprise runs through 2026, Oiltanking said, adding that the expansion is expected to be completed by the end of 2014.
Oiltanking expects the dock expansion and the agreement to add to distributable cash flow once they are operational.
The company’s shares have risen 42 percent to $44.85 over the past year, far outpacing the 7 percent increase in the Thomson Reuters United States Oil & Gas Transportation Services .
Oiltanking’s Houston facility had an aggregate active storage capacity of about 12.1 million barrels of crude oil and refined petroleum products as of Sept. 30. The terminal has six deep-water docks, according to the company’s website.
“This dock expansion project will provide incremental loading capacity and position us well to capitalize on the robust international demand for LPGs,” said Anne-Marie Ainsworth, chief executive of Oiltanking’s general partner, OTLP GP LLC.
To benefit from lower prices of gas in the United States, Japan’s Itochu Corp said in late February it would form a partnership with European oil trading house Vitol Group to export LPG from the United States to Asia.