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Ineos to deliver first ever US ethane from shale gas to China

Ineos and China’s SP Chemicals have agreed a long-term supply contract for the supply of ethane from US shale gas to China. The agreement also includes the construction of a new 95,000 cm ship, to be delivered in 2019, reportedly the largest ethane carrier built to date. The very large ethane carrier (VLEC) will ship US ethane from shale gas to SP Chemicals’ new gas cracker facility that is currently under construction in Taixing China. As with the Ineos ‘Dragon’ ships, the new vessel will be operated by Evergas. It will be the first VLEC in the company’s fleet of 23 gas ships and will be built in China under the management of the Jaccar Group.

SP Chemical’s gas cracker facility is due onstream in 2019 and is expected to produce 650,000 t/y of ethylene.

David Thompson, CEO of Ineos Trading & Shipping, said: ‘This is another world first for Ineos after importing shale gas to Europe in 2015. By bringing in US ethane from shale gas to China for the first time, we are now leading the way in shipping ethane worldwide to meet the needs of an expanding chemicals sector.’

Ethane is used to make ethylene – one of the world’s most important chemical building blocks. Ethylene is an important raw material used to make products for a wide variety of industrial and consumer markets such as transportation, electronics, textile and construction.

Potential UK gas hub

In other news, Ineos UK SNS has agreed to take a majority share in two exploration licenses in the Northern gas fields West of Shetland which contains the Lyon prospect, from Siccar Point Energy E&P. The deal complements the significant Ineos portfolio of producing assets and discoveries West of Shetland that were recently acquired from Dong E&P.

Lyon is thought to contain 1–3tn cf of recoverable gas. If successful it could be large enough to form a new gas-hub development similar to the Laggan-Tormore fields, which have been developed with subsea infrastructure and pipelines to the Shetland gas plant. Existing gas discoveries in the Lyon area such as Tobermory, Bunnehaven and Cragganmore would all be suitable tie-back candidates into a Lyon gas hub.

News Item details


Journal title: Petroleum Review

Countries: USA - China - UK -

Subjects: Gas markets, Ethane, Shale gas, Exploration and production, Gas, Petrochemicals, Business management, Shipping, Ethylene

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