NuStar Readies for Texas Condensate Exports

Pipeline company NuStar Energy LP is building storage at its South Texas operations to enable exports of oil producers' lightly processed condensate out of the port of Corpus Christi, a company executive said.

"We're building the storage so we can keep the condensate segregated" from other Texas crude oil that cannot be exported under U.S. law, Danny Oliver, NuStar's senior vice president of marketing and business development, said in an interview during the American Fuel and Petrochemical Manufacturers annual meeting in San Antonio.

The tanks are expected to be finished in June or July, he said.

NuStar's efforts are among the latest to facilitate condensate exports after the U.S. Department of Commerce, starting in late 2013, issued several approvals to do so as long as it had undergone enough minimal processing to qualify as an exportable refined product.

The agency said stabilizers, which remove natural gas liquids, meet that distillation threshold. Before, the industry believed more sophisticated processing in to motor fuels or their components was required.

NuStar does not have U.S. approval to export condensate, and the company is not seeking it, Oliver said.

While other pipeline companies that have such approvals take ownership of export-bound condensate, NuStar aims to provide the segregation and export infrastructure but will leave the approvals up to oil producers who ship the output, he said.

Oliver declined to identify those customers, but said some have approvals, and he expects those that do not to obtain approval before exporting rather than go ahead without it.

NuStar's 200,000 barrels per day (bpd) South Texas Crude Oil pipeline, which moves Eagle Ford shale output to its terminal at the port of Corpus Christi, can move condensate - a very light form of crude - in batches separate from other oil subject to the decades-old ban.

A second 65,000-bpd expansion of that line started up in February, he said.

Condensate-only storage tanks are necessary to facilitate exports to ensure it does not commingle with non-exportable crude from wellhead to dock.

Last year, NuStar added a third dock at its Corpus Christi complex, doubling loading capacity to 400,000 barrels for Panamax-class vessels just south of the Eagle Ford.

The condensate-only storage includes tanks that can hold 120,000 barrels at the pipeline's origination terminal in LaSalle County and others that hold up to 400,000 barrels at NuStar's Corpus Christi terminal.