14 November 2012 18:28 [Source: ICIS news]
HOUSTON (ICIS)--US exports of ethane to Europe are not likely to become a significant trend because of transportation costs as well as the cost of retrofitting existing European crackers to run on lighter feeds, an executive with LyondellBasell said on Wednesday.
"It is not cheap. It is not easy," said Sergey Vasnetsov, senior vice president for strategic planning and transactions for the company, who was speaking at Morgan Stanley's Global Chemicals Conference in Boston. "You are talking about a large, floating refrigerator, essentially."
INEOS announced in September it plans to ship US shale-derived ethane to its Europe operations. The ethane will be used as an alternative feedstock option for INEOS's gas cracker in Rafnes, Norway. Under the announced deal, ethane would be piped from Houston, Pennsylvania, to Marcus Hook, Pennsylvania, where it would be shipped to Europe.
Vasnetsov called the INEOS arrangement "unique and exceptional and relevant only to INEOS", adding that while it may make sense for INEOS to use ethane from the US, it will not likely make sense for other companies, including LyondellBasell.
The INEOS crackers are able to run on lighter feedstocks, but most European crackers run off of naphtha, he said. Retrofitting those crackers to be able to run ethane would "be expensive and not practical", Vasnetsov said.
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