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Gulf condensate output is peaking, even as Asian demand is on the rise. With nascent US condensate exports an additional threat, Mideast Gulf producers, particularly Qatar, must formulate a response.
The United States, whilst continuing to ban exports of crude oil, has recently allowed exports of lightly modified condensate. Despite the recent fall in international oil prices, volumes will continue to grow.
Since the mid-1970s, the US Department of Commerce has banned crude exports. But this year several producers of condensate at the key Eagle Ford shale formation secured a ruling that lightly processed condensate can be exported under existing rules. Though the authorities have yet to clarify what exactly they mean by “lightly modified” condensate, Eagle Ford condensate production has already reached markets in Asia and Europe. Using “Process X,” producers are able to go just one ambiguous step beyond stabilization in order to comply with the export rules.
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