Sunoco Logistics Partners LP (SXL.N: Quote, Profile , Research) said Wednesday that it has reached a deal to build a 2 million barrel crude oil storage facility at its Nederland, Texas, tank farm to support the proposed expansion of Motiva Enterprises' Port Arthur, Texas, refinery.

Sunoco Logistics will spend $70 million to build three crude oil storage tanks and to construct a 12-mile pipeline to connect the Nederland terminal, a major crude oil import hub, with the Motiva plant.

Motiva partners Royal Dutch/Shell Plc (RDSa.L: Quote, Profile , Research) and Saudi Arabia's state oil company Saudi Aramco are expected to decide by mid-2007 whether to proceed with a multibillion dollar expansion of their 275,000 barrels per day Port Arthur refinery.

The proposed $5 billion expansion would lift the refinery's crude oil distillation capacity to 600,000 bpd by 2010, making it one of the largest in the United States.

The Sunoco Logistics announcement comes a day after TEPPCO Partners LP (TPP.N: Quote, Profile , Research) said it would build a products storage facility for Motiva to support the expansion. [ID:nN19283815]

Although Motiva has not formally sanctioned the project, the company has already ordered some long-lead time refinery components and hired Bechtel Corp. and Jacobs Engineering Group (JEC.N: Quote, Profile , Research) to act as the engineering, procurement and construction contractors for the proposed expansion.