Eagle Ford condensate producers win, refiners lose in oil export decision

SeekingAlpha ^ | 25 Jun 2014

[shove_it]

The decision to allow two Texas companies to export condensates looks like a win for Eagle Ford Shale crude producers at the expense of refiners and companies planning to build processing plants along the Gulf coast.

Today's selloff in refiners reflected concern that the groups will lose some of their competitive edge if condensate exports become common: Valero Energy (VLO), the largest U.S. refiner, dropped 8.3%, PBF tumbled 10.72%, PSX fell 4.2%, and HFC slid 6.7%.

Oppenheimer notes that Pioneer Natural Resources PXD, DVN, MRO, COP and MUR produce the most Eagle Ford condensate, and could benefit if U.S. condensate prices close some of the gap with European prices; EOG, the largest Eagle Ford producer, produces little condensate and likely benefits little from the lifting of the condensate ban.

Investor reaction toward Gulf Coast gathering and processing MLPs such as EPD, MMP, KMP and NGLS was more muted, since plans to build splitters in Texas may be undermined by even modest rule changes in the crude export ban that allow Eagle Ford producers to sell condensate after running it from the wellhead to their own nearby - and much cheaper - distillation towers.

[thackney]

Some of my post above contained English. Some of it looks like a lame attempt at it.

“The ruling appears to require...”

“I read most of...”

and

“most condensate is primarily natural gas liquids” should have been “all condensate is NGL”. By definition, condensate is gas in the reservoir and condensing to liquid at surface conditions. That isn’t oil.

[familyop]

"...The decision falls far short of what oil producers and some of their allies in Congress have been urging — including a wholesale repeal of the trade limits on crude."

I agree with the present relaxation on exports for the purpose of helping Europe, but a repeal of all of the trade limits would be an extremely dangerous act. The U.S.A. needs more oil security than that for defense.

For folks who are reading this and have no instruction in overall warfare necessities, extreme quantities of oil are necessary for mechanized and air pursuits necessary for winning a war (expecially a world war). And the world now is getting to be much more dangerous than it was during the Cold War. Reserves, no matter how large, are not nearly enough.

[familyop]

Refiners Crash as Exports From Shale Boom Threaten Costs
http://www.bloomberg.com/news/2014-06-25/refiners-crash-as-exports-from-shale-boom-threaten-costs.html
[Title and link only, content prohibited from posting on FR.]

[thackney]

on speculation that

Key phrase in your linked article...