INEOS to provide US ethane to ExxonMobil, Shell for Scotland ethylene plant

INEOS, ExxonMobil Chemical and Shell have reached a long-term sale and purchase agreement to secure ethane from US shale gas for the Fife ethylene plant (FEP) at Mossmorran, Scotland, officials announced on Monday.

The ethane supply will start from mid-2017.

The Fife plant will receive ethane from INEOS’ new import terminal in Grangemouth, Scotland. Access to this new source of feedstock will help complement  supplies from North Sea natural gas fields. 

“Today’s agreement helps to secure additional feedstock for the Fife plant,” said Karen McKee, vice president of ExxonMobil’s global basic chemicals business.  

The FEP is owned and operated by ExxonMobil, while Shell has 50% of capacity rights. Access to ethane from shale production will provide sufficient raw material to run UK steam crackers to make ethylene at full operating rates, according to company officials.

“This is a landmark agreement for everyone involved”, said Geir Tuft, business director at INEOS O&P UK. “We know that ethane from US shale gas has transformed US manufacturing and we are now seeing this advantage being shared across Scotland.”

INEOS has committed £450 million to construct the new ethane import terminal at its Grangemouth facility. It represents the most significant investment in UK petrochemical manufacturing in recent times, and is supported by both the UK and Scottish governments. An existing pipeline will transport the gas from Grangemouth to Fife.

“This agreement gives FEP access to the new infrastructure developed by INEOS, and in so doing brings US advantaged ethane to FEP," said Elise Nowee, general manager at Shell Chemicals for base chemicals in Europe. "The agreement will help us to meet the long-term needs of our ethylene customers."

The Fife ethylene plant is one of Europe's largest and most modern ethylene facilities. The plant started production in 1985, and is one of only four natural gas-fed steam crackers in Europe. 

It was the first plant specifically designed to use natural gas liquids from the North Sea as feedstock. Alongside INEOS Grangemouth, it supplies manufacturing in Scotland, the rest of the UK and export markets with ethylene. 

It has an annual capacity of 830,000 tons of ethylene.