INEOS in deal to bring US shale ethane to Europe

HOUSTON (ICIS)–INEOS plans to ship US shale-derived ethane to its Europe operations under a deal announced on Wednesday.

The company said in a press release it reached an agreement with shale gas producer Range Resources-Appalachia, allowing it to secure a significant volume of ethane feedstock “for use in its Europan cracker complexes”.

INEOS spokesman Charles Saunders specified, “The ethane is expected to be used as an alternative feedstock option for INEOS’s gas cracker in  Rafnes, Norway.”

INEOS would not disclose financial details, and discussions between the parties was ongoing, Saunders said.

Under the deal, ethane would be piped from Houston, Pennsylvania, to Marcus Hook, Pennsylvania, where it would be shipped to Europe.

The ethane would be transferred from Marcellus shale reserves in the Appalachian region to Marcus Hook via Sunoco’s planned Mariner East pipeline project.

INEOS said it finalised 15-year agreements with Sunoco for pipeline transportation services and terminal services, using the Mariner East project.

Mariner East is a $600m (€462m) pipeline project with an initial capacity to deliver 70,000 bbl/day of propane and ethane from Marcellus Shale areas in western Pennsylvania to Sunoco’s facility in Marcus Hook.

Sunoco said on Wednesday it had a successful open season and has secured shipping commitments for the pipeline’s capacity, enabling the project to move forward.

Mariner East is expected to transport propane by the second half of 2014 and begin transporting ethane in the first half of 2015.

Sunoco said it is considering a second open season based on interest from producers, marketers and industrial consumers.

($1 = €0.77)