First US ethane shipment docks at INEOS Rafnes complex
Peter Taffe
23-Mar-2016
RAFNES,
NORWAY (ICIS)–The first shipment of US shale ethane
arrived in Europe on Wednesday at the INEOS’ Rafnes, Norway
complex.
The JS INEOS Intrepid docked at the site at 11:05 local time,
carrying ethane gas from the Marcus Hook, US, terminal run by
Sunoco Logistics.
The shipment is the first along the company’s ‘virtual
pipeline’ that will bring lower-priced ethane to Rafnes and,
later, Grangemouth in the UK, from the US.
The shipment represents the culmination of years of
development for INEOS, which saw the
Switzerland-headquartered chemicals producer source long-term
gas supply agreements in the US, contract the construction of
a fleet of special-purpose transport vessels, and invest in
storage tanks and ethane processing capacity in Europe.
Source: INEOS
The Rafnes cracker has been expanded to 620,000 tonnes/year
with the installation of a new furnace last December. Surplus
ethylene from Rafnes is sent to INEOS’s storage tank at
Antwerp which is connected to the ARG ethylene
pipeline.
The JS INEOS Intrepid carries 27,500 cubic metres of ethane,
equivalent to 14,500 tonnes. It is anticipated that four
ships will deliver a cargo of ethane each week to the
complex.
Rafnes will continue to receive supplies from the Sunoco
Logistics Pennsylvania terminal, while the Grangemouth
complex will be supplied by an Enterprise Products terminal
currently under construction in Morgan’s Point, Texas. The
$1bn fleet was built in China for liquefied gas and
petrochemicals carrier Evergas.
“We are nearing the end of a hugely ambitious project that
has taken us five years,” INEOS chief Jim Ratcliffe said at
the time of the Intrepid leaving dock on 9 March.
When plans to import US ethane to Rafnes and Grangemouth were
announced in late 2013, INEOS claimed that ethylene
production costs at the site would be under half the average
for European naphtha-derived product.
Oil prices have fallen sharply since then, and the gap
between European naphtha and US ethane costs has
narrowed.
However, price differentials still support the import of US
ethane to Europe, INEOS director Tom Crotty said this week,
and it is currently impossible to source sufficient feedstock
supplies to run the Grangemouth cracker profitably.
“In Europe, the price differentials in gas still support
importing US ethane. And in Grangemouth, the choice is clear.
We simply cannot physically get enough ethane there locally.
We are running at 40% capacity there,” Crotty
said, speaking on the sidelines of the
International Petrochemical Conference (IPC).
Aside from raising capacity utilisation at Grangemouth, the
shipments will allow the supply of ethane to an
ExxonMobil/Shell joint venture cracker in nearby Mossmorran,
Scotland, under a supply agreement that begins in
mid-2017.
Evergas will build eight ships of 27,500 cubic metres of
capacity and a further four of 32,000 cubic metres of
capacity. Eight of these ships will be dedicated to
transporting ethane for INEOS. These ships are multi-gas
carriers also capable of transporting LNG, LPGs, ethylene,
ammonia and vinyl chloride monomer.
The Sunoco Marcus Hook terminal is also expected to supply
ethane to a Borealis cracker in Stenungsund, Sweden, and
SABIC is also looking to import shale gas for its Wilton, UK,
cracker in future.
Additional reporting by Nigel Davis and Joseph
Chang in Dallas, and Tom Brown in London
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