INEOS Europe AG and Rex Energy Corporation (Nasdaq:REXX) have announced a new natural gas liquids sale and purchase agreement covering ethane, propane and butane. The natural gas liquids will be transported through the Mariner East infrastructure and exported by sea to INEOS’ European cracker complexes. Transportation of Ethane supplies commenced in April 2016 while propane and butane supplies will start with 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. We are excited about our new business relationship with Rex Energy and look forward to future opportunities between our companies,” said David Thompson, CEO INEOS Trading and Shipping.
“We are excited to begin this new relationship with INEOS,” commented Tom Stabley, President and Chief Executive Officer of Rex Energy. “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.”
On March 23rd, INEOS confirmed that its vessel, the INEOS Intrepid, had arrived at its petrochemicals plant at Rafnes in Norway, carrying 27.500m3 of US shale gas ethane. This was the very first time that ethane from US shale gas had ever been exported from the USA and the first time it has been imported into Europe. It gives the continent the chance to benefit from the US shale gas economics which did so much to revitalize manufacturing in the United States.
The project has been complex – involving the design and long term charter of all eight Dragon class ships (which 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 deep water terminal near Philadelphia, and the creation of new export facilities and storage tanks.
INEOS has invested $2 billion bringing US shale gas to Europe.
Jim Ratcliffe, the chairman and founder of INEOS said, “Shale gas economics have revitalized US manufacturing and has the potential to do the same for European manufacturing.”
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