The production of condensate is set to continue its rapid pace of production. Concurrently, domestic demand has declined due to constrained demand from refineries [1]. Although lease condensate is a byproduct of natural gas drilling, it is considered crude natural gas liquids market by the Energy Information Administration EIA and the Department of Commerce and thus banned from export.
This prevents creating an export market for all of the supply, something that is occurring with other NGLs such as butane. Low oil prices further hurt the near-term business case for natural gas exploration and development, including condensate.
An expanding condensate supply, driven by rapid natural gas production growth, faces slowing U. However, new demand enabled by condensate splitters which make lease condensate a refined product ready for export may provide temporary relief, pending natural gas liquids market favorable export ruling by the U. Specifically, Canadian demand for condensate as a diluent is a viable outlet for growing domestic supply. If Canadian demand remains strong and the regulatory outcome is positive, the condensate market could remain a key component of natural gas profits.
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Key Details Bentek estimates that condensate production is expected to grow from an estimated 1. More Information Bentek Energy: The electric industry natural gas liquids market to be on the cusp of great change. Regulators are rethinking the hundred-year-old rate-of-return paradigm, renewables costs are falling especially for solar photovoltaic technologyand the final rule is out on comprehensive power sector greenhouse gas emissions.
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