FREEPORT Texas Aug 13 Independent refiner
Phillips 66 said on Wednesday it is evaluating the
export of super-light crude oil known as condensate, after two
industry peers received U.S. government approval to ship it
overseas after minimal processing.
The company declined to say if it has sought formal
permission to export condensate from the U.S. Department of
Commerce, which is tasked with interpreting exceptions to a
decades-old ban on crude exports.
"We're evaluating the process and seeking a better
understanding," Chris Chandler, Phillips 66's head of natural
gas liquids (NGLs) said. "That process is still a little unclear
He spoke before the groundbreaking for the construction of a
100,000 barrel per day (bpd) fractionation plant that strips
NGLs from gas and a liquified petroleum gas (LPG) export
facility that will require $3 billion in investments.
The facility in Freeport, Texas will sit near the Gulf Coast
and is close to the company's 247,000 bpd refinery in Sweeny,
which has a link to Kinder Morgan's Crude and Condensate
pipeline, a 300,000 bpd line that moves crude from the Eagle
Ford fields to Houston.
The terminal after start up in 2016 will provide 4.4 million
barrels per month of export capacity for LPGs, which include
butane and propane.
Asked if the export facility could potentially export
condensate that has been minimally processed, Chandler said:
"This Freeport facility has a lot of expansion possibilities.
It's close to the Gulf of Mexico, three miles from open water.
We have the capability of doing a lot more here than we do
Chief Executive Greg Garland, while cautioning further plans
are still being weighed, said the company could end up spending
more on energy infrastructure on the Gulf Coast.
"We're thinking of $10 billion in projects right here on the
Gulf Coast," he said.
Demand is growing for new facilities to handle surging
output of oil and gas from the U.S. shale boom.
That output has prompted a rise in exports of refined
products and led to calls for a loosening of the ban on crude
exports, especially because local refiners have limited capacity
to run lighter crudes coming out of shale fields.
"In the not too distant future we need to export crude. We
are long light sweet crude in Texas," Texas Railroad
Commissioner Barry Smitherman, the state's top energy regulator,
In June, Commerce told Pioneer Natural Resources and
Enterprise Product Partners they could export stabilized
condensate as a refined product without a special license, which
is needed to export unprocessed domestic crude.
U.S. law has long defined processed oil as having passed
through distillation towers, key pieces of refinery equipment
that turn crude oil into finished products.
But the Commerce Department said equipment known as
stabilizers, traditionally used to treat crude so it meets
pipeline specifications, could also be used to comply with the
(Reporting By Kristen Hays; Editing by Terry Wade and Andrew