conde

Through the first half of the 2010s, U.S. production of field condensate — the ultra-light liquid hydrocarbon that bridges the gap between superlight crude oil and heavier natural gas liquids like natural gasoline — more than doubled, peaking at about 640 Mb/d in early 2015. As condensate production ramped up in the Eagle Ford and other plays, conde prices were discounted to move the product, markets were developed to absorb the barrels, and infrastructure was built to move the conde to those markets. Then, in a dramatic turnaround that continued into 2017, condensate production fell by more than one-third, the new markets — splitters and exports — were starved for product, and conde prices flipped from discounts to premiums. But the market is shifting yet again. Conde production is once more on the rise, with the Eagle Ford rebounding and production rising in the star of the show in crude oil markets: the Permian. Today, we discuss highlights from RBN’s new Drill Down Report on the condensate market roller-coaster.

The combination of rising condensate demand as new splitter capacity came online and falling conde supply resulted in just what you’d expect — higher conde prices. Worse yet for the companies that made throughput commitments for those new splitters, the once-favorable price differentials between conde and light-crude benchmarks West Texas Intermediate (WTI) and Louisiana Light Sweet (LLS) have been turned on their heads, and a number of splitters are operating at far less than capacity. Today, we continue our look at the roller-coaster world of conde, this time focusing on conde prices and differentials, and on the forces that may change the conde market once again.