Chemicals major Ineos said it has signed an agreement to secure ethane from the US that it will use as a feedstock to operate its steam crackers in Europe.
It has agreed a long-term deal with Range Resources Corp. for the lifting of ethane from the Marcus Hook facility, located near Philadelphia, from 2015.
Range Resources is an oil and natural gas producer with operates in the Appalachia and the southeast region of the US.
"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 & supply chain director at Ineos Olefins & Polymers Europe.
The agreement is effective upon the US Federal Energy Regulatory Commission's approval of the Mariner East project, a pipeline, processing and terminalling project that will interconnect the natural gas liquids resources in southwest Pennsylvania to the Marcus Hook facility, operated by Sunoco Logistics.
Ineos said it has also finalized Pipeline Transportation Services and Terminal Services agreements for the shipping of ethane from Houston, Pennsylvania to Marcus Hook with subsidiaries of Sunoco.
These agreements with the Sunoco units will be valid for 15 years and will provide Ineos Olefins & Polymers Europe with "significant supply options for the future," Ineos said in a statement late-Wednesday.
Once completed, the Mariner East project will transport 70,000 b/d of ethane and propane from Houston, Pennsylvania to the Marcus Hook terminal.
Ethane will then be separated by fractionation and held in storage ready for shipment to Europe, Ineos said, adding it is expected that ethane from the Mariner East Project will become available in 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. We will provide these companies with a credible option to diversify sales and supply ethane into our downstream cracker complexes in Europe," Thompson said.
Ineos operates steam crackers in Grangemouth in the UK, Cologne in Germany, Lavera in France and Rafnes in Norway.
