BHP offers to sell 650,000 bbls processed condensate in Houston in Jan

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By Marianna Parraga and Kristen Hays

HOUSTON, Nov 21 (Reuters) - BHP Billiton Ltd has launched a tender offering to sell a 650,000-barrel cargo of processed condensate for delivery during the first half of January at the Houston Ship Channel, according to a document seen by Reuters on Friday.

It was one of the first concrete steps by the multinational miner and oil producer to export the very light form of crude oil since it said in early November it would start doing so without explicit approval from Washington. The government is under pressure to soften a decades-old ban on domestic crude exports.

The tender offering says that going forward BHP will export the condensate on a monthly basis, with the intention of exporting two cargoes a month starting in the second quarter of 2015.

So far, three companies are known to have received U.S. Commerce Department approval to export condensate that has been minimally processed, run through a distillation tower like a stabilizer, which removes natural gas liquids but does not make motor fuels.

BHP said this month it would export minimally processed condensate without waiting for permission from Commerce.

It said it had examined issues involved and ensured that its condensate was eligible to ship to international markets, having undergone enough processing to qualify as an exportable refined product. BHP operates several stabilizers in the Eagle Ford shale in Texas, where condensate makes up nearly half of crude output.

Asian buyers have told Reuters they would be wary of taking BHP's condensate shipments if the company does not have explicit government approval.

BHP's tender offering says the shipment of condensate will have an API gravity of 52. API gravity is a measure of how light or heavy crude is compared to water, and energy companies generally see condensate as 45 or higher. Traditional West Texas Intermediate (WTI) crude oil is closer to 40.

The offering says BHP will receive bids until mid-morning Dec. 2 and they should be indexed to WTI prices. The cargo's seller will be Petrohawk Energy Corp, a subsidiary of BHP. (Editing by Terry Wade, Chizu Nomiyama and David Gregorio)