Market Outlook: Ethane trade advances

Ethane imports from the US have rapidly become integrated into the fabric of competitiveness for the handful of operators far-sighted enough to seize the advantage.

SABIC re-iterated the fact that partial conversion to ethane for its cracker at Wilton in the northeast of the UK will secure the site’s future.

“Our UK site in Teesside is of strategic importance to SABIC and also from a global supply chain perspective,” said Frank Claus, the company’s supply chain director for global liquids.

Claus was speaking at the naming ceremony for the GasChem Beluga, the first of a new generation of gas liquids carrying vessels that SABIC will use to ship ethane from the US Gulf Coast to the UK. Odette Claus, his wife, named the vessel in Teesport on Thursday, 27 April.

SABIC has built a large cryogenic storage tank at its UK cracker site and converted the cracker to accept ethane alongside other feedstocks.

“The ethane processing commenced successfully in early January and the cracker is now fully established processing the planned amount of ethane feedstock,” the company told ICIS.

SABIC has joined INEOS, India’s Reliance Industries and Brazil’s Braskem in importing ethane from the US for local processing. The world’s largest ethylene producer is also planning to invest directly in the US with Exxon-Mobil in a cracker project to tap into the ethane advantage. Borealis is expected to be importing ethane this year from the US for its gas cracker in Stenungsund, Norway.

US natural gas liquids (NGLs) availability has skyrocketed with the shale oil and gas revolution.

SABIC
SABIC’s Frank Claus (left) with wife Odette at the naming ceremony with crew members and Alfred Hartmann, founder of the Hartmann group (far right)

The far-sightedness of a small number of cracker operators has given some production locations a new lease on life. INEOS said it wants to attract further investment into its refinery and cracker complex in Grangemouth, Scotland, following the investment in ethane logistics and processing there.

It is planning to build Europe’s largest LPG storage tank in Antwerp, Belgium, to help it import butane for its cracker complex in Cologne.

At SABIC’s Wilton, UK, site, Whesoe engineering was the managing contractor of the 770,000 cubic metre ethane storage tank on the cracker site.

RELIANCE PROJECT

Reliance Industries said on 19 April that it had commissioned its “Ethane Project,” which includes ethane receipt and handling facilities at its Dajej Manufacturing Facility in Gujarat, India. The project had been completed in less than three years.

Reliance uses the world’s first very large ethane carriers (VLECs) to ship ethane from Morgan’s Point in Texas. It has commissioned six VLECs, the first with a capacity of 87,000 cubic metres (around 46,000 tonnes).

The ethane is received in a 90,000 tonne tank and used at Dahej but pipelines have been laid and crackers “upgraded” to bring crackers at Nagothane, 300 miles away, and Hazira, into the ethane infrastructure.

An ambient pressure and temperature pipeline has been laid to link the Dahej and Nagothane gas crackers with a spur to Hazira, where Reliance is working to modify the cracker there to accept ethane.

The Ethane Crystal, its first vessel, run by Mitsui OSK Lines, was operational in January.

UNIQUE ETHANE TANKERS

The new ships transporting ethane from the US now each have unique characteristics.

The INEOS Dragon ships are the first in their class and have been designed to be fuelled with ethane, making them more environmentally friendly. The vessels built for Reliance by Samsung Heavy Industries are based on an eco-friendly hull design and utilise a membrane cargo containment system.

Transporting ethane for Reliance now, the Ethane Cristal was delivered in November 2016. The Ethane Emerald was completed in December and the remaining ships are expected to be delivered this year.

Ocean Yield took delivery in November 2016 of the 38,000 cubic metre Gaschem Beluga from shipbuilders Sinopacific Offshore & Engineering in China and a sister vessel is scheduled for delivery on 1 July. The ships are chartered to the Hartmann Group and sub-chartered to SABIC Petrochemicals.

The GasChem Beluga made her maiden voyage from Shanghai through the Panama Canal to Houston in December to mark the official start of the contract-hiring period, SABIC said.