Plains All American says has approval to export condensate

By Kristen Hays

HOUSTON, Feb 5 (Reuters) - Pipeline company Plains All American LP has U.S. government approval to export minimally processed super-light oil, the latest company to confirm obtaining permission to find markets for condensate that has limited domestic demand.

"We have not exported any processed condensate, but we believe we are well positioned to export the product when market conditions warrant," Chief Operating Officer Harry Pefanis told analysts during a quarterly earnings call on Thursday.

Several such approvals have trickled out to companies since privately-held Peaker Energy got the first in late 2013, and Plains peer Enterprise Products Partners has exported cargoes from Texas. Producer BHP Billiton Ltd, which also operates stabilizers in Texas, moved ahead with shopping cargoes to buyers without waiting for approval.

Other requests are pending in what the oil industry sees as a significant softening of the decades-old U.S. crude export ban.

The industry previously believed condensate needed more sophisticated processing to qualify as an exportable refined product, but stabilizers that remove natural gas liquids and do not make motor fuels now suffice.

However, the sharp downturn in oil prices from last summer's triple-digit highs has cooled the international condensate market. An Enterprise tender seeking a one-year contract to sell condensate starting in March failed to solicit a buyer.

Pefanis on Thursday said Plains received confirmation late last year from the U.S. Department of Commerce's Bureau of Industry and Security that condensate processed in the company's 80,000 barrels per day stabilizer in western Texas provides sufficient processing.

That stabilizer, the largest in the state, is being expanded to 120,000 bpd this year.

Plains also is expanding its extensive, wholly-owned and joint-venture pipeline and storage network that moves crude from the condensate-heavy Eagle Ford shale in southern Texas and the Permian Basin in western Texas and New Mexico to Corpus Christi, Houston and the U.S. crude futures hub in Cushing, Oklahoma.

On Thursday, the company announced plans for two new pipelines in the Delaware Basin in the far west part of the Permian, where condensate also makes up for an increasing part of overall output.

Plains' expansion plans include a new terminal in Corpus Christi with a dock that can accommodate big ships. The company's current terminal is built just for barges, but Plains can tap third-party docks if needed. (Reporting By Kristen Hays; Editing by Terry Wade and Alan Crosby)