Pages

Tuesday, December 22, 2015

Tuesday, December 22, 2015

Active rigs:


12/22/201512/22/201412/22/201312/22/201212/22/2011
Active Rigs65174191188196

RBN Energy: infrastructure build-out in Corpus Christi, the series continues.
Until last week (December 13, 2015), the infrastructure being built to handle crude and condensate in the South Texas Port of Corpus Christi was planned on the assumption that crude exports were restricted to specific locations like Canada and condensate exports required special processing in a stabilization unit.
Now that Congress has lifted restrictions on crude exports - the floodgates would appear to be open for surplus Eagle Ford and Permian crude to ship to overseas markets – provided the economics justify such movements (which they don’t at the moment).
In the longer term though, exports could be the key to Corpus’ future. Today we continue our look at Corpus’s emerging role as a crude oil/condensate hub in a new world without export regulations.
Before last week’s repeal of crude export restrictions, the build out of new infrastructure to process and/or distribute the very light crude or condensate now being delivered by pipeline to Corpus Christi from the Eagle Ford and Permian basins was shaped by 1970’s era Department of Commerce U.S. crude oil export regulations.
Up until 18 months ago, those regulations were interpreted by the industry to limit the export of crude (defined to include lease condensate) to specific countries or very narrow circumstances. For example, Eagle Ford shippers could relatively easily obtain a license from the Bureau of Industry and Security (BIS – the agency charged with administering the regulations) to export crude or condensate to Canada because that country was a recognized exception to the export restrictions.
So for example, this allowed companies like Valero to make regular shipments of Eagle Ford crude from Corpus to their refinery in Montreal, Canada. Other exports of crude or condensate were perceived unlikely to be approved by the BIS. That meant the majority of Eagle Ford production delivered to Corpus had either to be sent to local refineries or shipped up the Gulf Coast by barge or tanker to other refineries in Texas and Louisiana, with occasional shipments further afield to refiners, including a few in Pennsylvania or New Jersey. The one local processing alternative to refineries appeared to be a condensate splitter – a stand alone “mini-refinery” that can split condensate into component refined products using a distillation process.
As a result,, several midstream companies began to investigate building such condensate splitters while existing Corpus refiners such as Valero and Flint Hills planned investments to reconfigure their plants to increase capacity to process light Eagle Ford crude and condensate (instead of the heavier imported crudes that they were largely configured to process).

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.