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Ohio Utica Shale

U.S. decision to export distilled condensates is big, analyst says

By Bob Downing Published: August 7, 2014

From GlobalData today:

  • US Bureau of Industry and Security’s approval for two companies to export distilled condensate could lead to significant export increases
  • ‘US condensate would be able to compete with Middle East exports into Asia, based on Dubai crude prices,’ says analyst

US Approval to Export Distilled Condensates is a Potential Game Changer, says GlobalData Analyst

LONDON, UK (GlobalData), 7 August 2014 - The recent approval by the US Department of Energy’s Bureau of Industry and Security (BIS) for two companies to export distilled condensate could be a game changer, opening the door to a significant increase in global exports of both this product and distilled crude oil from the US, according to an analyst with research and consulting firm GlobalData.

The BIS recently granted permits to Pioneer Natural Resource Company and Enterprise Product Partners to export lightly processed condensate from the US, a ruling which sets a precedent for further authorization of exports.

Carmine Rositano, GlobalData’s Managing Analyst covering Downstream Oil & Gas, says: “Both companies send condensate produced from the Eagle Ford shale play through stabilizers with distillation units, and the BIS determined that the condensate is sufficiently processed to be classified as a product.

“Stabilizers are required to separate light hydrocarbon gases from heavier hydrocarbons to meet pipeline requirements, but not all stabilizers have distillation units. Companies will now be assessing the economic viability of adding these units, given the prospect of exporting to the global market.”

Rositano notes that condensate could immediately compete in Latin America, where it could be used to lighten local heavy sour domestic crude in countries such as Venezuela, Ecuador, Mexico and Colombia.

“Going further afield, US condensate would be able to compete with Middle East exports into Asia, based on Dubai crude prices, and could also be shipped into Europe to reduce regional dependence on crude supplies from Russia,” the analyst concludes.




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