SAN ANTONIO— Copious amounts of condensate are filling up the Midcontinent region, and despite economic challenges partnerships are helping companies succeed, CP Energy’s president and CEO Greg Piper said at Hart Energy’s Midstream Texas conference.

Though there are profiting challenges being faced, he said moving condensate is increasingly part of his business. Piper also discussed the status and outlook for operations in the Panhandle and Midcontinent region.

Privately owned CP Energy, based in Edmond, Okla., provides crude oil, condensate and natural gas services. The company’s Midcontinent network includes 27-plus crude oil delivery and injection points, 20 stations in Texas, Oklahoma and Kansas as well as tanks in Cushing, Okla. The company also has a fleet of more than 85 trucks and a Grayco gathering system in Texas.

Much of the company’s purchasing business is index-based, meaning Piper must be as efficient as possible for his customers to get the best netback at their wellhead and to maintain profitability.

“A big thing we do is purchase the crude oil, and we’re purchasing a lot of condensate now and getting that efficiently to our markets—either markets they’re selling to or markets we’re selling to for buying at the leases,” Piper said.

Condensate Movers

CP Energy’s condensate business has picked up since a 2014 U.S. Bureau of Industry and Security ruling allowed E&Ps to export the minimally refined, ultralight crude.

Since 2014, the U.S. exported has about 10.5 million barrels of crude oil (MMbbl) to new customers, including some to that only started to import U.S. crude in 2015. Since condensate is considered crude oil, it is unclear how much of the exported oil is condensate.

For instance, the U.S. exported 21,000 bbl/d of processed lease condensate to Brazil in July. The crude was derived wholly from natural gas, according to the U.S. Energy Information Administration (EIA).

The EIA estimated that exports of processed condensate through the first five months of 2015 are estimated to have reached an average 84,000 bbl/d. However, Reuters reported that in May the U.S. exported between 120,000 and 140,000 bbl/d of condensate. In February, for instance, BP Plc exported nearly 670,000 barrels of minimally processed super-light crude oil from the Houston Ship Channel, according to ClipperData, an industry firm that tracks crude movements.

In the U.S., a lot of moving parts are required to get condensate to market, Piper said.

“The condensate and the lighter barrel are getting more and more prevalent across the Midcontinent,” Piper said. “The ability to blend away or take away that lighter barrel is becoming more paramount every day.”

All Of Nothing

Piper said the time has come to be creative, especially with relationships.

His view of partnerships: “I’d rather have half of something than all of nothing.”

“When you’re taking a producer’s crude oil away, dealing with their pumpers, working at the tank batteries, buying it, selling and doing division orders, you need to have a great, strong relationship with those producers,” he said.

CP Energy is partnering with Barcas Pipeline Venture LLC to build a Cushing, Okla., tank facility with the intention of increasing delivery, blending and tank capacity. The project consists of four 175,000-bbl tanks on 10 acres and is scheduled to be in service by first-quarter 2016.

“Storage and leasing from others only gets you so far,” Piper said. “If you get your own facilities there, you can help the producers out in your own way.”

Potential Upside

Piper also reviewed the falling U.S. rig count that operators have become all too familiar with.

At its peak in December 2014, the Midcontinent had about 231 rigs and is now down to about 100, most of which are oil-based.

Potential upside, however, is seen in the Cana-Woodford stack area. “It’s only come down 5% to 10%. It’s tough for producers at $45 but …if we can get the turnaround, this is going to be a very promising area for the basin.”

The Texas Panhandle and Midcontinent are critical oil- and gas-producing regions, he said. “The Panhandle is struggling with both refining costs [and] the type of oil that’s out there. The Granite Wash is [producing] very light, sweet barrels. And so there are some challenges out there in the Panhandle.”

Despite these challenges, Piper said the company plans on expanding in the Midcontinent region.