By Maria Gallucci - U.S. exports of condensate are ramping up with the nationwide shale drilling boom. Pioneer Natural Resources says it expects to double its shipments of the ultra-light oil to 50,000 barrels per day next year, Reuters reported Monday.
Pioneer is one of only two Texas oil companies allowed to sell condensate abroad after the U.S. Commerce Department eased a 40-year ban on oil exports in June. The company processes condensate at its Eagle Ford shale site in Texas; it then sells the oil to Enterprise Product Partners, which markets the oil to foreign buyers, according to Reuters.
“We operate 50,000 bpd [barrels per day] and we’re selling probably about 20-25,000 bpd, but eventually we’ll get up to 50,000 bpd” in 2015, Scott Sheffield, Pioneer’s chief executive, told the news agency. He said two cargo ships had already delivered condensate to South Korea and Europe, while a third cargo was on its way to Singapore.
U.S. energy companies have been pushing the federal government to end to export ban amid the recent surge in domestic oil and gas production from shale formations. The hydraulic fracturing, or fracking, process has enabled drilling in otherwise un-tappable areas, and in many places local refineries are struggling to keep up with the processing demands of so much crude oil.
U.S. Energy Secretary Ernest Moniz said earlier this year that the oil industry hasn’t yet made a convincing argument of why the government should lift the ban, which former President Gerald Ford enacted in 1975 following the Arab oil embargo crisis. But for some oil producers, the allowing of Pioneer and Enterprise to export condensate is a positive signal, the Wall Street Journal previously reported.
Pioneer’s Sheffield said that another 20 to 25 condensate producers are seeking similar exporting permits, Reuters noted. He said he expects the Commerce Department will grant many of those following the U.S. midterm elections in November.
“So we’ll see a lot more exports of condensate starting maybe late this year, early next year,” Sheffield told Reuters. Condensate production in the Eagle Ford basin where Pioneer operates is about 600,000 barrels per day.