Ineos to Supply Ethane to Mosmorran Cracker

10.11.2015 -

Ineos is emerging more and more as an indirect supplier and potential direct provider of shale gas-derived ethane to third parties rather than just a consumer. Hardly a day goes by in which a headline does not attest to new plans. In the latest announcement, the Swiss-based group said it has signed an agreement with ExxonMobil Chemical and Shell Chemicals Europe to supply ethane through an existing pipeline to the oil and petrochemical companies’ 50:50 cracker joint venture at Mosmorran, Scotland, on Scotland’s Fife coast.

Starting in mid-2017, the additional ethane supply, from the gas terminal Ineos is building at Grangemouth with financial assistance from the UK and Scottish governments, will feed the Fife Ethylene Plant (FEP), and ensure the cracker’s competitiveness, said Geir Tuft, business director at INEOS O&P UK.

Toward this goal, the new sources of ethane for feedstock will complement supplies from the North Sea gas fields for years to come and help secure skilled jobs in the long run, Tufts added. “Access to ethane from shale production will provide sufficient raw material to run UK steam crackers to make ethylene at full operating rates.”

One of only four natural gas-fed steam crackers in Europe, FEP was started up in 1985 as the first plant specifically designed to use natural gas liquids from the North Sea as feedstock. It has an annual output capability of 830,000 tonnes of ethylene.

Along with supplying Ineos at Grangemouth, FEP also pipes ethylene to manufacturing facilities in Scotland, the rest of the UK and export markets with ethylene.

Ineos drew up plans for the £450 Grangemouth terminal in 2013 following the end of an acrimonious labor dispute in which it threatened to close the Scottish site. In return for keeping Grangemouth open, it received £230 million in loan guarantees from the UK government in 2013, along with £9 million in grant funding support from the Scottish government.

An ethane terminal at Rafnes, Norway, is also part of Ineos’ forward-looking plans. The group has not confirmed Norwegian press reports that it has been eyeing construction of an ethylene cracker at the site but has not received the required financial assistance from local sources.

The petrochemicals producer is also buying up licenses for offshore gas exploration projects in the North Sea in an effort to reduce its dependence on US ethane and supplement possible shale gas finds in Scotland and England.