INEOS to source US shale ethane for European cracker feedstock

INEOS Europe on Thursday said it completed supply and infrastructure agreements that will secure a significant volume of ethane feedstock from the US, for use in its European cracker complexes.

The company has agreed to a long-term deal with US-based Range Resources for the lifting of ethane from the Marcus Hook facility in Pennsylvania, starting in 2015.

The Marcus Hook site was formerly a Sunoco refinery and is now being used as a terminal, operated by Sunoco Logistics Partners.

The agreement is effective upon Federal Energy Regulatory Commission (FERC) approval of the Mariner East project.

“The supply deal with Range Resources complements our portfolio of feedstock agreements for our European crackers and will strengthen our competitive position as an ethylene producer in Europe for the foreseeable future,” said David Thompson, procurement and supply chain director at INEOS Olefins & Polymers Europe.

INEOS also finalized pipeline transportation services and terminal services agreements for the shipping of ethane from western Pennsylvania to Marcus Hook with subsidiaries of Sunoco.

The agreements will be valid for 15 years and will provide INEOS Olefins & Polymers Europe with significant supply options for the future, according to the company.

It is expected that when completed, the Mariner East project will transport approximately 70,000 bpd of ethane and propane from Houston, Pennsylvania, to the Marcus Hook terminal facilities.

Ethane will then be separated by fractionation and held in storage ready for shipment to Europe. It is expected that ethane from the Mariner East project will become available during the first half of 2015.

“INEOS can now position itself as an attractive customer for upstream companies with interests in the Marcellus, Utica and Upper Devonian gas formations,” said Thompson.

“We will provide these companies with a credible option to diversify sales and supply ethane into our downstream cracker complexes in Europe.”

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