Hmmmm.....depending on what they're actually trying to export, they may be skirting the laws or not - from your article:
New discoveries and advanced drilling techniques helped produce more than 1 million barrels last year of a purer, lightweight oil that’s closer to gasoline than darker, heavier crudes.
Production of the light oil, known as condensate, doubled from 2011, according to RBN Energy LLC.
New Splitters
The glut, in turn, is leading producers to turn to the new plants, called splitters because they split off gassy molecules in a distillation process that is far less complex than that of a typical refinery. The tower-like facilities can turn the condensate into liquid fuels such as kerosene, propane, butane, and naphtha, an ingredient in gasoline.
Refiners including Valero and pipeline operators including Magellan Midstream Partners LP have so far discussed plans for a dozen such plants, with the total potential to process more than 460,000 barrels of condensate a day -- almost half last year’s production, according to a Feb. 5 note from analysts at RBC Capital Markets led by Leo Mariani.
“The international buyers of these products will likely need to refine them further, so this is basically a veiled form of condensate exports,” wrote Mariani, who’s based in Austin, Texas.
That last bit conflicts with the red highlight sentence directly above - are the distilling the condensate into those liquids, or trying to export a liquid mixture that contains them, but no gasoline? NGL's recovered from NG wells are allowed to be exported, the same ones listed above. The question of what they're actually trying to export is further explained here:
Bureaucrats in Washington D.C. are quietly tweaking the rules governing oil exports, and suddenly everybody’s buzzing about condensate.
What is condensate? It’s a type of ultralight oil that’s flowing in huge quantities out of shale plays from Texas to Pennsylvania. When underground condensate is mostly a gas, but it condenses into a liquid when pumped to the surface.
Even in liquid form, condensate is light and gassy. In fact, it has more in common with gasoline, but the U.S. has long treated it like all other oil, restricting its shipments overseas except in special cases like exports to Canada.
That’s changing.
Condensate was the oil boom’s redheaded stepchild. But yesterday, the Commerce Dept. indicated that selling condensate abroad might be simpler than previously thought. By granting permission to two Texas energy companies to sell condensate abroad, the federal government cracked open the door that could lead to exports of unrefined oil previously prohibited under the longstanding export ban.
The ban has its roots in the Arab oil embargo of the 1970s and restricts shipments of raw crude and condensate. Traditionally, all that oil has to go to a refinery or special equipment called a “splitter” – which is essentially a small refinery – where it’s cooked until it breaks into fuels like gasoline and diesel.
Now these companies have permission to minimally process condensate in the oil field – avoiding a trip to the refinery or splitter – and using a different method to stabilize and distill it. This seemingly subtle change to the rules could have wider reaching implications and pave the way for more relaxing of the oil export ban.
Until oil production started to ramp up in U. S. shale formations, the distinction between crude and condensate didn’t matter much, and the small amounts of condensate pumped from the ground were left mixed in the crude. But these days as much as 12% of daily U.S. crude production might qualify as condensate, overwhelming demand for the fuel, according to energy investment bank Simmons & Co. International.
The distinction between crude and condensate is a matter of opinion. One standard the energy industry uses to compare different types of oil is called API gravity – a measure of how heavy or light petroleum is relative to water. Lighter crudes have higher gravity. For instance, West Texas Intermediate – known as WTI – is a predominant U.S. light crude and has traditionally measured an API gravity of 39 degrees on this scale. Anything above 45 degrees API can be considered condensate, depending on who you ask. Some of the stuff pouring out of wells in Texas, North Dakota, and Colorado is coming in at a range of 50 to 60 degrees API.
More confusion - the processing in the field to avoid refineries or these new splitters being built conflicts with the first article about BP selling products from the splitters. Then there's the ambiguous definition of "condensate", where the API appears to not have a single value on the books. Finally, the "granting permission to two Texas energy companies to sell condensate abroad," could be some form of political payoff - whether this benefit will be expanded to all producers isn't guaranteed, but I'd expect the rest of them will be clamoring for similar treatment so there's a level playing field.
Lastly, back to the stock this board is about, NAT - a website I consult from time to time, have been using for years, predicts target prices for NAT that do not exactly thrill me - not sure if their algorithm is sophisticated enough to use daily tanker spot rates, I'm guessing not, because at current Suezmax rates show below (doubled in one week?!?):
Indicative figures - $/day TC equivalents | Change since - $/day TC equivalents |
Segment | Dwt | Route | 20-Nov-14 | 19-Nov-14 | 13-Nov-14 | 20-Nov-13 |
Suezmax | 130,000 | Caribs - US Gulf | 86,091 | -1,228 | 48,952 | 71,245 |
These PTs look way too low - from Stoxline.com:
Target: Six months: 10.48 One year: 12.24