Ethane from the Marcellus and Utica shales will feed a flexible steam cracker in Stenungsund, Sweden, under a 10-year agreement between producer Antero Resources and Austria-based Borealis, a provider of polyolefins, base chemicals and fertilizers.
The project includes a shipping agreement between Borealis and Navigator Holdings and a related investment in an upgrade of the cracker and the construction of an ethane storage tank. The ethane supplied from the U.S. complements a recently signed ethane supply contract with Statoil providing Borealis with an alternative attractive source of feedstock for its petrochemical plant in Sweden, the company said.
"We need to take advantage of the significant shift in ethane availability triggered by the U.S. shale gas boom," said Mark Garrett, Borealis chief executive. "In an increasingly challenging environment in Europe, this is an exciting opportunity to increase the competitiveness of our integrated polyolefins business."
Borealis has also signed parallel fractionation, pipeline and terminal service contracts to enable free on board delivery of ethane at the Marcus Hook terminal operated by Sunoco Logistics (see Shale Daily, April 29). The first delivery of ethane is planned for late 2016.
The company did not disclose the volumes of ethane it will be buying from Antero.
Navigator Holdings is one of the largest owners and operators within the "handysize" liquefied gas carrier segment. To serve the Borealis contract, Navigator will build a new ethane vessel equipped with dual fuel engines.
Borealis said its cracker in Stenungsund is one of the most feedstock-flexible crackers in Europe. In addition to ethane, it can also crack naphtha, propane and butane. Stenungsund has significant liquefied petroleum gas (LPG) storage capacity, allowing the company to source LPG from various sources with vessel sizes ranging up to very large gas carriers.
"The ethane contract with Antero Resources in combination with the recently renewed North Sea-based ethane contract with Statoil provides us with an ideal portfolio of sources balancing cost competitiveness and supply security," said Markku Korvenranta, Borealis executive vice president for base chemicals.
Recently, Enterprise Products Partners LP said its Gulf Coast ethane terminal, now under development, is almost fully contracted and likely would be expanded (see Daily GPI, Aug. 4).