Magellan Midstream Partners has had "preliminary discussions" on investing in condensate stabilizers while moving full steam ahead on its 50,000 b/d splitter in Corpus Christi, Texas.
Recent action by US regulators cleared two companies to export lightly distilled condensate, raising interest in export infrastructure and also calling into question announced splitter projects, which refine condensate into exportable products.
"If clarity is achieved on the ability to export condensates that are stabilized, I think that is something we would look to invest in," chief executive Mike Mears said of stabilization equipment. The company is unlikely to try to obtain clearance for its own exports, but would build out infrastructure for customers interested in doing so.
Magellan is not getting "any indication whatsoever" from its splitter customer that the project could be canceled, though the customer contract allows for the deal to be terminated with financial consequences. The splitter is supported by a long-term take-or-pay commitment from trading firm Trafigura.
The company is currently working on permitting and contractor selection for the splitter, It is expected to come online in 2016.
"We certainly think we are well positioned if [restrictions on] condensate and/or crude exports were to be relaxed," Mears said, noting its 100,000 b/d Double Eagle pipeline with Kinder Morgan that delivers Eagle Ford condensate to its marine terminal in Corpus Christi. "Obviously, people are exploring their options. With regards to our facility, there is really nothing we need to do differently than to export condensate, if that is still allowed."
The company has been touting to customers its ability to add more storage at Corpus Christi and the potential to expand the Double Eagle pipeline, which is running around 20,000 b/d currently. Still, murkiness around the future of crude and condensate exports in the US make it unlikely the company will soon see commitments on export infrastructure, Mears said.
The company's 300,000 BridgeTex pipeline is slated for startup in September to move crude from west Texas to Houston, Texas. The pipeline's specs do not currently allow it to move condensate, but it could physically do so if shippers support it.
"We may have some limitations on tankage on either end due to the higher vapor pressure. So you may need some incremental tankage to store it. But the pipeline itself can move it without a problem," Mears said. The company does not expect condensate to initially move on the pipeline.
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