Centurion Terminals building U.S. Condensate Export Terminal

 

A private logistics company is building an export terminal at the southernmost tip of Texas in Brownsville to receive super-light crude and process it into fuel components for export.

Centurion Terminals also is building its Delaware Basin Express, which includes two terminals in far West Texas to receive condensate, a very light form of crude oil, that will reach its Port of Brownsville terminal via rail, a company executive said.

Both are slated to start up in the third quarter 2016.

Centurion Terminals, which is not affiliated with Occidental Petroleum Corp or its subsidiary, Centurion Pipeline, said this week the company had secured a 10-year, take-or-pay contract with an undisclosed anchor shipper, enabling construction to start on the West Texas system. Centurion broke ground on the Brownsville terminal last month.

The West Texas system in the Delaware Basin part of the Permian Basin, expected to cost up to $75 million, will feature pipeline-connected storage terminals in Orla and Pecos, Texas, with rail loading at Pecos, said Ken Douglas, executive vice president of Centurion Terminals.

The Brownsville terminal, expected to cost up to $100 million, will include two existing distillation towers and a third to be added that will operate as condensate splitters capable of initially processing up to 50,000 barrels per day into diesel fuel, liquefied petroleum gases and naphtha, a building block for gasoline.

A splitter transforms condensate into refined products. It is more sophisticated than a stabilizer, which just removes natural gas liquids from condensate, but less so than a refinery.

The Brownsville terminal's rail operation will offload up to 160,000 barrels per day of Delaware Basin-produced condensate.

The shipper will then buy all the splitter output under its contract with Centurion and export or sell it to other customers, Douglas said.

"We provide the transportation and processing logistics. Our anchor shipper buys and sells the product," Douglas said. "Everything that comes to Brownsville with this initial shipper will be processed so that it can be exported or sold locally."

Kinder Morgan Inc has a similar deal with BP Plc to buy all output from its pair of splitters at its Houston Ship Channel operations.

Centurion also is eyeing a second phase to the operation that would include a 24-inch pipeline to move light crude and condensate to Three Rivers and Corpus Christi from Pecos. That project, which remains in the planning phase, would start up in 2018, Douglas said.

(Reporting By Kristen Hays; Editing by Chris Reese)