San Antonio — Houston-based BHP Billiton Petroleum hopes to export the light oil known as condensate from the Eagle Ford Shale.
President Rod Skaufel said this week in San Antonio that the company is among those applying for an export permit with the U.S. Commerce Department.
Eagle Ford operator Pioneer Natural Resources Co. and the midstream company Enterprise Products Partners already have obtained the permission to export the condensate, and Enterprise shipped the first 400,000 barrels to Asia in late July.
Crude oil exports have been banned since 1975, but the federal government opened an avenue for export in June when it ruled that condensate could be exported with minimum processing through a distillation tower.
BHP is the second-largest producer in the Eagle Ford and makes around 130,000 barrels of crude oil and other liquids daily. Much of the company’s best acreage in its Black Hawk Field in DeWitt County is in what the industry calls the “sweet spot” — a place with both prolific crude and condensate production.
“Clearly there’s a limited amount of capacity that the refiners can take of these ultralight condensates,” said Skaufel, following a speech at a World Oil breakfast event at the St. Anthony Hotel downtown. “We have applied to export our condensate, as I’m sure other Eagle Ford operators have done.”
Condensate is an ultralight oil that condenses from gas to liquid when it reaches the surface. It’s clear and resembles lighter fluid more than black crude oil.
Skaufel said that not all of the company’s condensate would be eligible for export. While most of the condensate goes through the company’s South Texas processing plants, some of it is still moved by truck, and that portion would not be able to exported.
Some reports have said the federal permission to export condensate represents a step toward lifting the ban on crude exports, a response to an oil embargo by Middle Eastern nations that led to gasoline shortages in the United States.
Related: U.S. Energy Dept finalizes overhaul of natural gas export reviews
Others say that the export of lightly processed condensate would help address the growing mismatch between what domestic refiners can process and what’s being produced in abundance in U.S. shale fields like the Eagle Ford or the Permian Basin in West Texas.
“We’ve really got no choice but to export,” Pioneer President and COO Timothy Dove said this month at a Texas Independent Producers & Royalty Owners Association conference in San Antonio.
In Texas, the Eagle Ford arcs from the border to East Texas. While wells bring up a mix of hydrocarbons, the top lip of the swoosh makes mostly crude oil, the middle makes mainly condensate and the bottom lip makes dry natural gas.
The field is widely known for a drilling boom and its rising crude oil production, but it’s also a prolific producer of condensate. In May, the field made more than 878,000 barrels of crude oil daily, along with 227,000 barrels of condensate, according to the Texas Railroad Commission.
The consulting firm RBN Energy estimates that the U.S. produces 1.2 million barrels a day of condensate now and could produce as much as 1.6 million barrels a day by 2018.
Despite possible pushback from refiners, who have benefitted from cheaper shale crude, cracks are developing in the export ban. Several major oil companies — and even the Washington Post’s editorial page — have argued for the restrictions to end as U.S. crude production has risen from about 6 million barrels a day in 2011 to nearly 8.4 million barrels a day now.
Express-News and Houston Chronicle archives contributed to this report.
Courtesy :  BAKKEN