DOC authorizes EPP, Pioneer to export condensate
Two companies have received authorization from the US Department of Commerce to sell condensate to buyers outside the US, and analysts expect the sales—probably involving condensate from the Eagle Ford in South Texas—could begin in August.
DOC’s Bureau of Industry and Security (BIS) issued a private ruling on June 24 saying Enterprise Products Partners LP and Pioneer Natural Resources Co. could sell condensate to foreign buyers. Few details were immediately available.
“[DOC’s] determination has led to further clarity about what the definition of processed might mean,” said Michael Cohen of Barclays Research Inc. of New York. He believes “a widespread lifting of the crude oil ban is out of the question without a lifting of the Jones Act.”
Condensates drop down as liquids from natural gas streams and also as part of the liquid coming out of the wellhead from shale oil plays.
Consultant Muse, Stancil & Co. previously has noted in industry presentations that much of the Eagle Ford production is condensate.
Wood Mackenzie Ltd. said it has long believed that DOC officials had the tools to authorize limited exports of condensate.
“While it may allow barrels to find a new home and some economic optimizations to be achieved, we don’t think it dramatically affects crude prices in the short term,” WoodMac said in a news release. Long-term effects on crude prices have yet to be studied.
The US has export bans in place for unprocessed crude oil. A DOC spokesperson said there has been no change in policy.
Cohen said the Jones Act would need to be lifted for a widespread lifting of the crude export ban because of national security and economic reasons.
“The political inter-linkage associated with these two policies means that [DOC] will likely continue to operate within the confines of the current statute,” he said.
Contact Paula Dittrick at [email protected].
Paula Dittrick | Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.
