Factbox: U.S. condensate splitter projects

By Reuters Staff

8 Min Read

HOUSTON (Reuters) - A very light form of crude oil known as condensate makes up an increasing amount of U.S. shale crude output, but North American demand for it is limited because too much can overwhelm refinery distillation systems. Starting in 2012, several companies announced plans to build facilities that "split" condensate into various products, such as unfinished distillates and naphtha, which is used to make gasoline or dilute heavy crude, to export or sell domestically.

So far about $1 billion in condensate splitter projects have been built or are under construction, with another $715 million to $1 billion or more planned, though some may be scaled back or dropped. The oil price rout squeezed discounts of condensate and U.S. crude to global crudes, siphoning price advantages of the cheap feedstock.

Also, this month's lifting of the decades-old U.S. crude export ban allows any crude to be shipped to international markets without restriction. Before, most crude and condensate had to undergo at least some processing to qualify as an exportable refined product.

Last year U.S. regulators softened the ban, allowing companies to export even more minimally processed condensate that had been run through a stabilizer, which removes natural gas liquids but does not make fuels. Some midstream players forged ahead with splitters, having secured long-term contracts with companies to buy and market all the output, while others held back as oil output slowed on lower prices. Some considered building cheaper stabilizers instead.

Of the three that started up this year, two are operated by Kinder Morgan Inc at the Houston Ship Channel and BP Plc has a 10-year deal to buy all the output from both units. Buckeye Partners LP has a similar take-or-pay deal with Trafigura, its 20 percent partner in a newly commissioned splitter at their Corpus Christi terminal.

Magellan Midstream Partners has a similar deal with Trafigura for another 50,000 bpd splitter in Corpus Christi slated to start up next year, as does Targa Resources Partners LP with Noble Group Ltd, though Targa and Noble may opt for a new terminal with or without a splitter. Privately-held Centurion Terminals also has a long-term deal with a U.S. crude marketer to buy 70 percent of the output from splitters planned for its Brownsville, Texas terminal.

Other companies like Castleton Commodities International and Phillips 66 either do not have or have not announced partners for potential splitter projects. Martin Midstream Partners had said the company was veering from a splitter to a 50,000 bpd, $200 million stabilizer, but now no processing is necessary to qualify crude for export.

Here is a rundown of projects:

(‘000 bpd)

Kinder Morgan Inc Two stand-alone Near Galena 100,000 bpd First 50,000 bpd

splitters, $436 Park terminal in two unit started up

million on the Houston phases; BP in March 2015;

Ship Channel Plc has a second in July

long-term 2015; May add

contract to another 50,000

buy all the bpd capacity

throughput

Magellan Midstream Stand-alone At its marine 50,000 bpd; Second half

Partners LP splitter, $250 terminal in Trafigura 2016; expandable

million Corpus [TRAFGF.UL] to 100,000 bpd

Christi, TX has a

long-term

take-or-pay

agreement to

buy the

throughput

Buckeye Texas Stand-alone At the 50,000 December 2015;

Partners LLC; joint splitter, with partnership's had begun

venture of Buckeye 900,000 barrels marine commissioning as

Partners LP with 80 of crude and terminal and of Sept. 16,

percent interest, products storage storage 2015

and Trafigura with an complex in

[TRAFGF.UL] with 20 additional 1.4 Corpus Christi

percent interest million barrels TX

of condensate

tankage to be in

service 1Q 2016

Centurion Terminals Two distillation Port of Initially Terminal under

LLC towers and a Brownsville, 50,000; construction,

third to be added Texas; also 10-year startup 3Q 2016

at new export 1.5 million contract with

terminal under barrels of undisclosed

construction; storage shipper to

cost undisclosed capacity and buy 70

room to percent of

expand; rail splitter

terminal that output

can offload up

to 160,000 bpd

of Delaware

Basin

condensate

Marathon Petroleum Reconfigured At 242,000 bpd Catlettsburg Canton December

Corp distillation Catlettsburg 35,000 bpd; 2014;

towers to be KY and 80,000 Canton 25,000 Catlettsburg May

splitters at two bpd Canton OH bpd 2015

refineries; $250 refineries

million

Castleton Stand-alone Corpus Christi 100,000 Construction had

Commodities splitter and bulk been slated to

International petroleum start in 2015,

terminal with delayed to

storage tanks and mid-2016; U.S.

barge loading Environmental

operations that Protection

can handle Agency issued

500,000 bpd of air permit in

crude condensate September 2014.

for export; also

will produce

diesel, jet fuel,

naphtha and other

petroleum

products; $400

million

Targa Resources Stand-alone Targa's 35,000 bpd; Awaiting

Partners LP splitter, $115 Channelview Noble Group permits, will

million terminal on Ltd has a start up in late

the Houston long-term 2016 or 2017 if

Ship Channel agreement to build; Targa and

buy the Noble may

throughput instead opt to

build out

Targa's new

Patriot terminal

on the ship

channel to add

significant

storage and

potentially a

liquid petroleum

gas export

facility

Martin Midstream Had explored a Corpus Christi 50,000 to Construction

Partners stand-alone terminal 100,000 for estimated to be

splitter in splitter, no 24 to 30 months,

engineering and capacity could be shorter

design phase, disclosed for for a

estimated cost potential stabilizer; no

$200 million to stabilizer money will be

$500 million spent until a

depending on firm contract is

size; on hold as reached with a

customers explore partner or

exporting lightly partners

processed

condensate

Phillips 66 New splitter at At 247,000 bpd N/A Filed for

Texas refinery; Sweeny TX construction

in preliminary refinery permit with

engineering Texas regulators

phase, no cost in October 2014,

disclosed final approval

to be considered

later, depending

on customer

demand

Cheniere Energy Inc Straight-run and San Patrico 100,000 total Awaiting

stabilization hub near crude and permits, seeking

capacity with Corpus Christi condensate commercial

initially million TX; to connect with 60,000 agreements, to

barrels of via pipeline of make final

storage and a to liquids stabilization decision to move

five-bay truck terminal at capacity; forward with

rack; $550 Ingleside, TX, expandable project;

million initial to have 2 with commercial

investment; nixed million additional operations

splitter in barrels of dock space, slated for 2017

mid-2015 storage and a storage and

truck rack; pipelines

exports would

load onto

ships at

Aframax-capabl

e marine dock

infrastructure

Oiltanking Partners Potential Beaumont, TX N/A N/A, Oiltanking

LP acquired by splitter or terminal had been in

Enterprise Products stabilizer; no discussions with

Partners in November cost disclosed customers about

2014 project's

viability before

mostly acquired

by EPD, which

has said may

consider a

stabilizer

Sources: Company presentations, conference calls, announcements, analyst reports

Reporting by Kristen Hays; Editing by Terry Wade and Diane Craft

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