It hasn’t been widely reported, but during cold snaps in late fall and early winter, a number of crude oil producers in the Permian Basin have faced a “perfect storm” of events that made it challenging to meet crude pipelines’ vapor pressure standards. At first glance, this may seem like a problem for “the technical folks” to deal with, but in fact the issue has been affecting the ability to move crude to market, and the price of oil at Midland, TX versus the crude hub at Cushing, OK. It has even forced Permian producers to “shut in” some crude production—at least for a time—along several major pipelines in the region because they’ve been unable to adequately prepare their crude for piping or trucking. Today we examine an under-the-radar problem that’s been vexing producers in the U.S.’s leading crude oil play, and affecting oil prices and markets.
Just over a week ago (July 3rd) Reuters reported that Enterprise Product Partners (EPD) sold their first 400 MBbl export cargo of condensate to Japanese trader Mitsui. That export follows private letters from the Bureau of Industry and Security (BIS) to Enterprise and Pioneer that represent a change in the government’s interpretation of 40-year-old legislation banning the export of unprocessed crude and condensate from the US. The apparent relaxation of the rules could open up export opportunities for shale producers – especially in the wet gas / condensate window of the Eagle Ford in South Texas. Today in the first of a two part series we describe existing stabilizer capacity and export routes to market in the Eagle Ford.
Alkylate is a valuable blending component that accounts for about 12 percent of the US gasoline pool. Alkylate is manufactured by combining elements derived from NGLs and crude oil refining and is an important link between these two hydrocarbon markets. Alkylate has critical qualities required to meet complex modern gasoline quality specifications. Today we look at the qualities and manufacture of alkylate.