Ineos announces new shale gas agreement

Ineos Europe and Rex Energy Corporation have announced a new natural gas liquids (NGLs) sale and purchase agreement covering ethane, propane and butane. The NGLs will be transported through the Mariner East infrastructure and exported by sea from Marcus Hook to Ineos’ European cracker complexes. The transportation of ethane began in March. Shipment of propane and butane will begin following the completion of Mariner East 2 pipeline in 2017.

‘This contract adds to our supply portfolio providing for long-term sourcing of advantageously priced US natural gas liquids for our European crackers,’ commented David Thompson, CEO Ineos Trading and Shipping. Tom Stabley, President and Chief Executive Officer of Rex Energy, said: ‘With the new sales agreement, we will now have three different outlets to deliver our natural gas liquids volumes, both domestic and international. The new outlets will enhance the economics of our wells in the Butler operated area and our overall resource potential.’

The INEOS Intrepid, carrying 27,500cm of US shale gas ethane, arrived at the Ineos petrochemicals plant at Rafnes in Norway in late March. This was the very first time that ethane from US shale gas had ever been exported from the US and the first time it had been imported into Europe (see Petroleum Review, April 2016). The project has been complex – involving the design and long-term charter of eight Dragon class ships (which will collectively create a virtual pipeline across the Atlantic), connection of the new 300-mile Mariner East pipeline from the Marcellus shale in Western Pennsylvania to the Marcus Hook deepwater terminal near Philadelphia, and the creation of new export facilities and storage tanks.

Ineos has invested $2bn bringing US shale gas to Europe. The company also recently completed operational trials on the second manufacturing unit (Train 2) of its gas cracker at Grangemouth (pictured), eight years after being mothballed. The recommissioning is in preparation for the arrival of US shale gas ethane at Grangemouth in autumn 2016. 

Source: Ineos