More US Gulf condensate output to benefit refineries - consultant

17 April 2012 05:47  [Source: ICIS news]

NEW ORLEANS, Louisiana (ICIS)--Increased production of light oil or condensates at the US Gulf Eagle Ford shale is expected to make oil processing less costly, said an energy consultant on Monday.

Light oil can be separated into raw diesel, naphtha and gas oil for refineries, and can also be exported, said Lesa Adair, vice president and chief financial officer at Muse, Stancil & Co, on the sidelines of the Gas Processors Association’s (GPA) annual meeting in New Orleans.

The consultancy firm forecasts Eagle Ford production of crude and condensate to hit around 600,000 bbl/day by 2020, up from 160,000 bbl/day in 2011. In 2011, condensate made up 40-50% of the production.

Refineries utilise a distillation tower to separate crude oil based on temperature for production of different products, and the same technology can be used to separate the components of condensate, said Adair.

Condensate can be split via a distillation tower into heavier, more profitable diesel, or into gas oil or naphtha, said Susan Starr, principal at Muse, Stancil & Co.

Diesel is a raw product that can be sold to Mexico and South America. It can also be sold to a refinery for further processing, along with the heavier condensate slate, naphtha and gas oil, said Starr.

Historically, stand-alone distillation towers have not been profitable, but high production of light condensates and cheap transport to the refinery sector could make a separate distillation tower for condensate profitable, said Starr.

Kinder Morgan announced plans to expand its Eagle Ford condensate processing facility by 25,000 bbl/day in Galena Park, Texas. The plant will be positioned to reach US Gulf industrial markets and the Houston Ship Channel.

The $130 million facility will split condensate into light and heavy naphtha, kerosene, and gas oil. The plant will also have the capability to expand to 100,000 bbl/day.

Production of naphtha and gas oil could reduce current imports of the product, said Starr.

By: Sheena Martin
+1 713 525 2653

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