The US government could shed some light on the murky topic of distilled condensate exports in January, when the Census Bureau may unveil a revised system that tracks condensate separately from other refined products.
US distilled condensate exports are set to grow substantially after the Commerce Department recently clarified its regulations to determine that condensate is a refined product and not subject to a 1970s-era ban on most US crude exports.
US midstream company Enterprise Products Partners and US independent Pioneer Natural Resources have acknowledged that the Commerce's Bureau of Industry and Security (BIS) has allowed them to export distilled condensate from Texas' Eagle Ford shale formation. Enterprise exported a 400,000 bl shipment in July, most of which was supplied by Pioneer. Pioneer said it expects equivalent monthly shipments through year-end.
Condensate now accounts for a sizeable percentage of Eagle Ford crude production, which averaged about 1.5mn b/d in September. At the same time, new splitters in South Korea, Singapore and China are boosting Asia-Pacific demand for condensates.
But US exports will be hard to track comprehensively unless Census, which tracks trade data, breaks distilled condensate shipments out as a specific export category. Reliable data on US condensate exports is hard to come by, because industry is currently not required to disclose its applications or other communications with the BIS.
If Census decides to list condensate in its own category, it will not become public until the agency issues its annual list of export categories on 1 January. The agency would not clarify how existing condensate exports have been categorized to date.
Stabilizers distill condensate to lower vapor pressure and remove volatile lighter hydrocarbons to meet industry standards for safe storage and transport. That process also changes the nature of the liquids enough to qualify as a refined product, which are not subject to an export ban.
Other companies have sought their own rulings from BIS, including some producers in the Utica shale field. But since the export of distilled condensate is so new, it remains unclear how Census will classify these shipments.
Federal law requires US imports and exports to be categorized, and the Census Bureau's Foreign Trade Division is responsible for establishing those categories. Other federal agencies, including the Energy Information Administration (EIA), rely on those categories to report export volumes for various energy products.
EIA said it has not received any word from the Census Bureau as to how distilled condensate exports have been classified or whether they will be assigned a new export category. If Census assigns condensate its own category, EIA said, it will be simple to track export volume and destination. If condensate is lumped in with another refined product, however, it could be more difficult to differentiate the condensate exports from the rest of the exported products.
"If this is placed into an existing category that already has sufficient volumes and a variety of destinations, it will be very difficult to discern how much of an increase of that statistical category might or might not be [condensate]," an EIA spokesman said.
The Census Bureau said it is open to public suggestions on its Harmonized Tariff Schedule, including the creation of a new export category. The agency would not confirm that it is considering adding a new category for condensate exports.
Such nominations are reviewed collectively by Census, the US International Trade Commission and US Customs and Border Protection. For a new category to be approved, it must have sufficient volume to warrant its own category, but must not be so specific as to be traceable to a single company, Census said. Changes made to the export categories are published only once per year, on 1 January, and require consensus between the three agencies.
Condensate production in the US has been growing steadily, with the EIA estimating 749,000 b/d of lease condensate production in 2012.
US consultancy RBN Energy put total US condensate production above 1mn b/d last year, thanks to output from Eagle Ford and the Permian, Anadarko, Bakken and Utica formations.
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