UPDATE 2-Oil companies rush to exploit end of U.S. crude export ban

Wed Dec 23, 2015 2:00pm EST
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(New throughout, adds industry background)

By Valerie Volcovici and Catherine Ngai

Dec 23 (Reuters) - U.S. energy group Enterprise and oil trader Vitol raced to exploit the end of a 40-year ban on most U.S. crude exports, the first of many firms eager to "stress test" last week's historic opening.

Despite a sudden change in global oil market conditions that many oil traders say has eliminated the economic advantage of shipping domestic crude far abroad, some companies that have long lobbied for the change in policy may be eager to show that their effort was not in vain, according to some experts.

Houston-based pipeline group Enterprise Products Partners LP said in a statement it will provide pipeline and marine terminal services to load a 600,000-barrel cargo of domestic light crude oil scheduled for the first week of January.

An Enterprise spokesman said that the cargo belongs to Vitol , which will decide on a delivery destination. A spokeswoman for Vitol could not immediately be reached for comment on where the oil was going. The company did not provide any details on the pricing of the cargo.

"We are excited to announce our first contract to export U.S. crude oil, which to our knowledge may be the first export cargo of U.S. crude oil from the Gulf Coast in almost 40 years," said A.J. "Jim" Teague, chief operating officer of Enterprise.

Some oil traders expressed surprise at the news, saying that with the U.S. crude futures contract trading consistently above Brent for the first time since the shale era began five years ago, exports of most varieties would not be economical.

Even so, others are queuing up. Pioneer Natural Resources , an independent producer that along with Enterprise received the green light from the U.S. government last year to ship a lightly processed form of ultra-light crude to test the ban, expects to commence exports by mid-2016, it said in a statement.   Continued...