A report Monday that the U.S. Commerce Department has queried companies seeking authority to export condensate should not get export proponents too excited thinking that clarity on the issue will be forthcoming from Washington, DC, ClearView Energy Partners LLC analysts said in a note.
In June, Commerce's secretive Bureau of Industry and Security (BIS) confirmed that two companies asked if they could export condensate under existing regulations (see Shale Daily, June 25). In August, according to a Reuters report on Monday, BIS sent questionnaires to about two-dozen other companies that had asked about exporting condensate. According to the news service report, which cited unnamed sources, BIS has been sitting on the questionnaire responses since July.
The pending requests for condensate classification, which ClearView, citing its sources, numbers at 15-20, could elicit "the second data point that constitutes a trend," the analysts said, "but our best understanding is that none of them has been finalized, nor do we expect any of them imminently."
ClearView said it does not expect BIS to issue further determinations on commodity classification until the broader policy process around exports concludes. That process includes ongoing studies by the U.S. Energy Information Administration (EIA) of crude oil export, which isn't expected by the analysts to be concluded until mid-December.
What could come next from BIS is more one-off determinations, or the agency could publish informal guidance on exports, ClearView said. Third, the process could be changed through a rulemaking that clearly defines condensate and says that it is eligible for export. "...[N]one of the three options is likely until a policy exists, even if that policy isn't publicly disclosed," ClearView said.
"We continue to view a rulemaking as the most likely option, but we still would not expect it to emerge any sooner than January (a timeframe that reflects not just political sensitivity to the issue, but also the aforementioned EIA studies)."
Separately, it was reported last week on the FuelFix blog that liquefied natural gas terminal developer Cheniere Energy Inc. is negotiating to buy acreage in Ingleside, TX, along the La Quinta Ship Channel for a possible condensate storage and shipping facility.