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Energy pipelines and terminals operator, Sunoco Logistics Partners LP (SXL - Analyst Report) has inked a long-term deal with Shell Trading US Company (STUSCO), an affiliate of European energy major Royal Dutch Shell plc (RDS.A - Analyst Report). Per the deal, STUSCO will become an anchor customer of the Mariner South project of Sunoco.

Management reveals that in order to build high-standard export and import facilities of liquefied petroleum gases (LPG) in the Gulf Coast of U.S., the Mariner project will unite Mont Belvieu-based storage and fractionation terminals of Lone Star NGL LLC with the pipeline facilities of Sunoco, that run from Mont Belvieu, Texas to Nederland, Texas. Lone Star is a joint venture between natural gas pipeline operator, Energy Transfer Partners LP (ETP - Analyst Report) and natural gas service provider, Regency Energy Partners LP (RGP - Snapshot Report).  

The Mariner South project is expected to have a capacity to transport 6 million barrels of LPG per month initially. The project is expected to be online by the first quarter of 2015.

Philadelphia-based Sunoco, a master limited partnership (MLP), acquires, owns, and operates a geographically diverse portfolio of refined products and crude oil pipelines and terminal facilities. Sunoco Logistics is organized into four segments – Refined Products Pipeline System, Terminal Facilities, Crude Oil Pipeline System, and Crude Oil Acquisition and Marketing.

Sunoco currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.    

With low-risk and stable cash flow-generating energy infrastructure assets, Sunoco offers investors an opportunity to capture income growth through steadily-rising cash distributions and capital appreciation.

However, unfavorable regulatory changes by the Federal Energy Regulatory Commission (FERC) would impact the partnership’s results.

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