Light Crude? Heavy Gas? What is "Condensate"?

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The difference between liquid crude oil and gaseous natural gas is obvious to most. However, the two substances are chemically similar--both are hydrocarbons, and they differ only in the length of their carbon chains. As such, there is a lot of grey area between the two.

Natural gas, or methane, is a simple one-carbon molecule, no more, no less. Carbon atoms can be added, creating substances like hexane that remain liquid at room temperature. These liquids are known as natural gas liquids (NGLs), liquid petroleum gases (LPGs) and condensates. As condensates get heavier, they become muddled with light crude oils. These terms overlap heavily, depending on the situation and who is using them.

On the spectrum from methane to crude oil, NGL and condensate are the most commonly used terms to describe these intermediate liquids. LPG is a term whose definition varies, but usually applies to butane and propane. Colloquially, NGLs are closer to the methane end of the spectrum, otherwise known as "gas-derived condensate." These lighter hydrocarbons that are produced in oil wells are more commonly called condensate, or "liquids-derived condensate."

The line between NGL and natural gas is clearly drawn, because ethane, the next-heaviest hydrocarbon after methane, liquefies at -100 degrees Celcius, or roughly 62 degrees Celcius higher than methane. The same is harder to say of condensates and light crude oil.

Because crude oil, as it is found in the ground, is a mix of heavier hydrocarbons, it is difficult to pinpoint exactly where the dividing line between crude oil and condensate lies. Both are shipped together in the U.S. and Canada. Condensate is often used to dilute the crude oil from heavy oil sands in Canada, so that it can be shipped via pipe. When used in this way, the condensate is known as diluent. As such, pipelines such as the Norlite pipeline by Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta), will carry the diluent back to the producers up north, so that they can send the diluted bitumen down to the U.S. market.

View Project Report - 300147776

The condensate that makes up that diluent comes from many places, such as the Eagle Ford shale in Texas. There, the condensate is mixed with crude and shipped out along pipelines, such as the Kinder Morgan Crude and Condensate (KMCC) pipeline by Kinder Morgan Energy Partners (NYSE:KMP) (Houston).

View Project Report - 300153194

The line between light crude and condensate is further blurred because of similarities in how both liquids can be handled from field to refinery.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.