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Phillips files for permit to build condensate splitter in Sweeny, TX

By Kristen Hays

HOUSTON, Dec 8 (Reuters) - Phillips 66 is seeking a permit to build a condensate splitter at the company's 247,000 barrels-per-day (bpd) refinery in Sweeny, Texas as as the company mulls the export of condensate, a super-light form of crude oil without violating a decades-old U.S. crude export ban.

The permit application filed earlier this month with the Texas Commission on Environmental Quality identifies the project as a "simplified condensate splitter unit" and is a step in the company's ongoing study of the project.

The splitter, as well as an Eagle Ford crude and condensate pipeline and a second 110,000 bpd fractionator at the refinery site "are currently in the engineering design and permitting phase," spokesman Dennis Nuss said on Monday.

Phillips 66 executives have said the company is evaluating the export of condensate, a super-light form of crude oil.

Phillips 66 is building a liquefied petroleum gas export facility in Freeport, Texas, which is near the Sweeny refinery complex where a 100,000 bpd fractionation plant also is under construction.

The 200,000 bpd pipeline, as proposed, would stretch from the condensate-heavy Eagle Ford shale in South Texas to the company's Freeport terminal, and could be expanded to 400,000 bpd. The company says it will make final decisions on those projects next year.

"A decision on condensate processing will also be made in 2015," Nuss said.

The new pipeline would be in addition to a 100,000 bpd lateral line that connects Kinder Morgan Inc's 300,000 bpd Eagle Ford-to-Houston crude and condensate pipeline to the Sweeny refinery.

A splitter breaks up condensate into various components, such as naphtha, a building block for gasoline, and diesel and jet fuel.

At least three companies have received U.S. government approvals to export condensate that has undergone less sophisticated processing than that provided by a splitter.

Rather, running condensate through a stabilizer that removes natural gas liquids and contaminants was deemed enough to qualify the output as a refined product that could be exported without violating the decades-old crude export ban.

Even so, several other splitter projects are under construction or planned along the Texas Gulf Coast. Kinder Morgan aims to start up the first of two 50,000 bpd splitters in January, and Magellan Midstream Partners and Targa Resources Partners LP also have projects in the works.

(Reporting by Kristen Hays; Editing by Terry Wade and Marguerita Choy)