Oil Storage Business is Booming
(John Kemp is a Reuters market analyst. Oil producers may be struggling as a result of low prices but the oil storage business has never been in better shape. U.S. refiners, traders and logistics companies added an extra 11 million barrels of working storage capacity for crude oil between March and September, according to the U.S. Energy Information Administration. Since September 2011, total capacity for storing crude in the United States has expanded by almost 87 million barrels, 19 percent, the EIA reported on Monday ("Working and Net Available Shell Storage Capacity" Nov. 30). Most of the extra capacity has been added at tank farms and other offsite locations (+84 million barrels) rather than refineries (+2.5 million barrels) where space is often constrained.
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.
US Issues First Guidance on Petroleum Exports
The Obama administration released on Tuesday a long-awaited explanation of what petroleum is allowed to be shipped under the contentious 40-year ban on exports of most domestic crude. The Bureau of Industry and Security (BIS) released the guidance in the form of frequently asked questions, or FAQ, in the first effort by the administration to clarify an issue that has caused confusion and consternation in energy markets for more than a year. The BIS guidance said energy companies must use distillation towers to produce lightly treated oil called condensate to export it and not simply treat it with flash drums that have so- called heater treaters.
BHP to Test U.S. Oil Export Legal Limits
BHP Billiton Ltd is set to be the first company to export lightly processed ultra-light U.S. oil without explicit permission from the government, further testing the limits of an increasingly contentious ban on foreign sales. Eight months after two other U.S. energy firms said they had received the first formal authorization to sell domestic condensate abroad, BHP said it had determined that its oil would also meet the legal criteria for export since it was being minimally processed in distillation towers in South Texas. "We took the necessary time to thoroughly examine the issues involved and ensure that the processed condensate was eligible for export…
