HOUSTON (Reuters) - Cheniere Energy Inc is moving ahead with a $550 million export terminal in Texas that will ship processed condensate to international markets, a top executive said on Monday.
In addition, the terminal will be able to export any type of domestic oil if the decades-old U.S. crude export ban is ever lifted, said Nelson Lee, director of crude trading and origination at Cheniere.
“The reason why we’re going ahead with that project is we think that we will have unfettered crude oil exports in U.S at some point, and there aren’t the sort of logistics for the crude to exit the United States,” Lee said at an energy conference in Houston.
Lee recently joined Cheniere from BHP Billiton Ltd, where he headed condensate exports. BHP was the first company to export condensate without waiting for approval from U.S. regulators.
Speaking at American Business Conferences’ North American Crude Markets and Storage Summit, Lee said that the terminal, slated to start up in 2017, will have 2 million barrels of oil storage and dock infrastructure that can accommodate Aframax-sized tankers.
Cheniere also is building liquefied natural gas (LNG) export terminals in Corpus Christi, Texas, and Cameron, Louisiana.
The oil terminal will have storage and stabilization at a hub in San Patricio near Corpus Christi, which will be connected via pipeline to Cheniere’s operations in Ingleside, Texas, on the Corpus Christi Bay. There, processed condensate will ship out.
Cheniere axed plans to build a condensate splitter at the terminal, focusing instead on stabilization capacity, he said.
Splitters “split” condensate into various components including jet fuel, diesel and naphtha, a building block for gasoline.
Stabilizers provide less sophisticated processing that removes natural gas liquids. In 2013, U.S. regulators started telling companies that such minimal processing is enough to qualify super-light oil, prevalent in the nearby Eagle Ford shale in Texas, as an exportable refined product that does not violate the crude export ban.
Reporting By Kristen Hays; Editing by Peter Galloway