First U.S. shale gas shipment to Europe to arrive this week

LNG carrier tanker
Author: Wolfgang Meinhart, Hamburg, GNU Licence, Wikipedia

The Swiss chemical giant INEOS has made history by chartering the first ever shipment of ethane from the Sunoco Logistics Partners’ Marcus Hook terminal in the U.S. to Europe. The INEOS Intrepid, a purpose-built 23,000 gt gas carrier departed the export terminal in Philadelphia, Pennsylvania, on 9th March with a cargo of 170,000 barrels of ethane, bound for Norway. The shale gas, which is cooled to -130ºF (-90ºC) for the journey of 3,800 miles (6,100 km) across the Atlantic, is expected to arrive at its destination on 19th March.

INEOS Intrepid is the first of a fleet of eight of the ethane-capable gas carriers that INEOS plans to hire to carry American shale gas to Europe. The vessels are being built by Sinopacific Offshore and Engineering, and are owned and operated by Danish firm Evergas.

Sunoco has invested $2.5 billion constructing the 300-mile Mariner East pipeline network to transport ethane and other liquid fuels, such as propane and butane, to the Marcus Hook terminal. The “virtual pipeline” created by the fleet of INEOS giant tankers will transport these fuels to petrochemical plants in Norway and Scotland offsetting the diminishing production from the North Sea.

Jim Ratcliffe, the chairman and founder of INEOS says, “Shale gas economics has revitalised US manufacturing. When US shale gas arrives in Europe, it has the potential to do the same for European manufacturing”.

In Britain, where INEOS is the third-biggest shale operator, invested £640 million in the shale exploration, hoping for domestically-sourced shale gas to deliver low-priced feedstocks to their Grangemouth plant. As UK shale exploration and production is still some way off – if it happens at all – INEOS has secured deliveries of the abundant U.S. shale to feed its chemical plants.

To receive the gas, INEOS has built the largest two ethane gas storage tanks in Europe at Rafnes in Norway and Grangemouth in Scotland, where it will use the ethane from US shale gas in the two gas crackers, both as a fuel and as a feedstock. It is expected that shipments to Grangemouth will start later this year.

INEOS’ investment in ferrying large amounts of inexpensive American ethane across the Atlantic is a novel solution in a world where using small ethane carriers on coastwise and short-sea routes is the normal practice. The company said that a variety of commercial factors in the North Sea region were making it difficult to sustain petrochemical production due to feedstock costs, and that the shipments would allow it to protect jobs and keep plants open in Scotland and Norway.

Jim Ratcliffe adds, “We are nearing the end of a hugely ambitious project that has taken us five years. I am proud of everyone involved in it and I believe that INEOS is one of very few companies in the world who could have successfully pulled this off. I can’t wait for the INEOS Intrepid to finally get to Norway and complete the job”.

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