Orders have surged for stabilizers in processing condensate to a level of quality sufficient for pipeline transportation. This past summer, stabilized condensate acquired the coveted “refined product” designation by the US Department of Commerce Bureau of Industry and Security (BIS). Because of this development, many of the well known mass transfer oriented companies serving the refinery and petrochemical now stand to benefit from new stabilizer orders coming from the midstream industry.
A stabilizer is a relatively simple fractionator, compared to the multi-stage fractionators seen in refineries (e.g., crude/vacuum tower, FCC main fractionators, depropanizer, etc.), so it therefore seems that small, private fabricators will also get in on the stabilizer action, as condensate production from shale plays increases.
By 2020, consultancy Wood Mackenzie estimates crude and condensate produced from the Eagle Ford shale play will reach 2.0 million bpd. However, aside from stabilizers, the much more sophisticated condensate splitters have yet to be built in the U.S. Shale based condensate can be refined in the same way as crude, but condensate splitters are often a more appropriate way of obtaining higher-value products and petrochemicals from the feedstock.
Condensate splitter capacity in Asia-Pacific will reach 1.1 million bpd by the end of this year, from about 665,000 bpd a year earlier. To compare costs, Reuters reported on September 9 that a new 10,000 bpd stabilizer and 21 storage tanks in Live Oak County, Texas, had a combined $100 million price tag, while a 50,000 bpd condensate splitter roughly costs roughly about $250 million and refinery crude/vacuum tower costs about $400 million.
Pioneer Resources CEO Scott Sheffield confirmed at the beginning of September the company has exported its second round of “refined” condensate exports, this time to Europe. The first highly publicized export was back in July of a 400,000 barrel shipment from the US Gulf Coast, through the Panama Canal and to a South Korean refinery, where the condensate is processed in crude distillation units (CDUs), whenever margins from processing the feedstock are better than for light crude. But for the most part, the condensate to be exported to the Asia-Pacific region is to feed the new splitters.
The Asian splitters can process a range of condensate from different parts of the world with varying sulfur content. Most of the recent Asia-Pacific condensate splitter capacity additions are from the start-up of four projects — Jurong Aromatics (100,000 bpd) in Singapore, SK Energy (120,000-140,000 bpd) and Samsung Total (140,000 bpd) in South Korea, and China’s Tenglong unit, which originally came on stream in 2013.
Pioneer and its midstream services partner, Enterprise Products Partners expect to export at least one cargo load per month of condensate from the US Gulf Coast. For comparison, Qatar exports about 22 cargoes of condensate per month, mainly to Asia, while Australia exports about five cargoes per month. Other major operators in the Eagle Ford like BHP Billiton have also applied to the BIS for export permits, but have yet to receive approval.