EPCA ’12: INEOS weighing opportunities of US ethane supply deal

07 October 2012 17:12  [Source: ICIS news]

BUDAPEST (ICIS)--INEOS will focus on Norway as it brings ethane from the US to its gas crackers in Europe but will need to invest at Grangemouth in the UK to import liquefied gas, INEOS Olefins & Polymers chief executive, Tom Crotty, said on Sunday.

“The availability [of ethane] and very low pricing creates an opportunity for us,” Crotty said on the sidelines of the 46th European Petrochemical Association (EPCA) meeting. “Ethane is the prized feedstock.”

INEOS has signed an ethane supply agreement from Marcus Hook in Pennsylvania with Range Resources which will run from 2015. Ethane and other natural gas liquids (NGLs) will be drawn from the Marcellus Shale deposits in the northeast of the US.

Approximately 70,000 bbl/day of ethane and propane are expected to be transported from Houston, Pennsylvania to the Marcus Hook terminal facilities, also in Pennsylvania, and separated ready for transport.

The Switzerland-registered INEOS Group will ship the additional ethane supplies first to its Noretyl gas cracker at Rafnes in Norway and revisit previously shelved plans for a 100,000 tonne/year expansion of the 550,000 tonne/year unit, Crotty, who is also INEOS Group director of communications and EPCA president, added.

Investments have been made on the 700,000 tonne/year KG cracker at Grangemouth to allow it to crack more propane and particularly butane as feedstock for the plant, which is piped from the Forties oil field in the North Sea and has become ethane light.

“There is a huge amount of arbitrage to play with,” Crotty said. And the company will have to make a decision as to whether it invests to import ethane by ship to the Grangemouth site.

INEOS has a “whole range of options” for the additional ethylene it will produce from ethane in Europe. It could be fed into its ethylene system – the company runs ethylene short in Europe – or allocated to expansions in derivatives such as polyvinyl chloride (PVC) in Norway.

The company is in the process of commissioning its 1m tonne/year ethylene terminal at Antwerp in Belgium. That facility “will give us the opportunity to buy ethylene from anywhere in the world,” Crotty said.

The annual EPCA meeting runs from 6-10 October.

By: Nigel Davis
+44 20 8652 3214

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