Chemical giant Ineos Group has confirmed a deal with Exxon Mobil and Shell to supply ethane from U.S. shale gas production to a Scottish ethylene plant.
Under the agreement, Ineos will supply the ethane to the Fife, United Kingdom site starting in 2017 via its new 450 million pound ($684.5 million) import terminal at Grangemouth, U.K.
The site is owned and operated by ExxonMobil and Shell.
Ineos said access to this new source of feedstock would help complement supplies from North Sea natural gas fields and ensure the competitiveness of a major manufacturing facility in Scotland.
Ineos olefins and polymers business director Geir Tuft said: “This is a landmark agreement for everyone involved.
“U.S. ethane from shale gas will provide an additional resource, supplementing domestic production from the North Sea. It will now be used by two of Scotland's largest manufacturing plants helping to secure their feedstock supply for years to come.”
The Fife Ethylene 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 U.K. and export markets with ethylene and has an annual capacity of 830,000 metric tons of ethylene.
Shell Chemicals general manager base chemicals Europe, Elise Nowee said: “This agreement gives FEP access to the new infrastructure developed by Ineos and in so doing brings U.S. advantaged ethane to FEP. The agreement will help us to meet the long-term needs of our ethylene customers.”