Like a Box of Chocolates – The Condensate Dilemma

Like a Box of Chocolates – The Condensate DilemmaHistorically, U.S. field condensate production has been the backwater of liquid hydrocarbon markets, with most condensate blended off into crude. Shale has changed that, doubling field condensate production from about 500 Mb/d in 2011 to more than 1,000 Mb/d in 2013. Production of shale hydrocarbons, particularly those in the prolific Eagle Ford play in South Texas are very rich in condensates. Other plays are also experiencing growth in condensate volumes, including Permian, Anadarko, Bakken and Utica.

Condensates come in many varieties, including field or lease condensates, natural gasoline (plant condensate) and naphthas. Within these broad categories there are significant quality variations, particularly for field condensates. This inconsistent quality can be a big problem for refiners, and that problem is growing. Field condensate production is expected to increase by another 600 Mb/d over the next five years. During the same time frame, natural gasoline production from gas processing plants will also grow by approximately 220 Mb/d.

Growth in production volumes will collide with declining demand for natural gasoline in the motor gasoline blend pool and U.S. government rules that prohibit export of field condensates. Only increases in exports to Canada for diluent and exports of natural gasoline to overseas markets will keep the market balanced.

This report examines the major developments in the world of condensates for the past few years and looks forward through 2018. The analysis begins with an overview of the condensate family, including field condensate, natural gasoline and naphtha.   The remainder of this report then reviews:

  • Field condensate production forecast by major basin; quality variations
  • Natural gasoline production; supply/demand balance
  • Gulf Coast condensate splitter infrastructure and projects
  • Spotlight on Utica condensate supply and infrastructure development

Like a Box of Chocolates – The Condensate Dilemma is the second in RBN Energy’s Drill Down report series, a suite of twelve reports coming from RBN during 2014 covering many of the key issues expected to impact the markets for crude oil, natural gas and natural gas liquids.

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