Petrochemical giant Ineos Group, which now ships U.S. natural gas to European ports, said Monday it has clinched a long-term supply agreement to ship domestic ethane from domestic shale fields to China’s SP Chemicals.
The agreement includes constructing the biggest very large ethane carrier (VLEC) ever built, Ineos said.
“This is another world first for Ineos after importing shale gas to Europe in 2015,” said Ineos CEO David Thompson of the trading and shipping arm. “By bringing in U.S. 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.”
The VLEC to carry ethane for SP Chemicals is scheduled for delivery in 2019. The ethane would be shipped to a gas cracker facility now under construction in Taixing.
Like the Ineos Dragon ships, the carrier, to be built in China, would be operated by Evergas and be the first VLEC in its fleet of 23 gas ships.
“It has long been a dream for SP Chemicals to integrate upstream,” said CEO Chan Hian Siang.
SP Chemicals plans to commission the Taixing gas cracker plant in 2019 that could produce 650,000 tons/year of ethylene, the CEO said. “This first long-term supply agreement for ethane with Ineos will be an important milestone for SP Chemicals to achieve self-sufficiency for its ethylene requirements.”
As of last year Ineos said it had invested about $2 billion to carry ethane from U.S. onshore fields to Europe.
Ineos in 2016 carried Enterprise Products Partners LP’s first ethane cargo from the Morgan's Point terminal on the Texas coast. About 265,000 bbl of ethane in that shipment was sent to an Ineos facility at Rafnes in Norway. Also last year Ineos shipped ethane from the Marcus Hook Industrial Complex south of Philadelphia to a cracker in Norway.
From its 12 North American plants, Ineos Olefins & Polymers USA said it produces about 8.9 billion pounds/year of olefins, polymers and high density plastic pipe.
Sasol Ltd. and Ineos Europe AG under a final investment decision issued in 2014 also are building a high-density polyethylene (HDPE) plant in the La Porte, TX petrochemical complex southeast of Houston. The facility is designed to produce 470 kilotons/year of bimodal HDPE.