Energy security has long been a hot topic for European leaders and politicians. The shortfall between production and consumption in the EU has led to increasing dependency on energy imports from non-member countries – more than half of the EU-28’s energy comes from countries outside the EU, and this proportion has been generally rising over recent decades, according to statistical information organisation Eurostat.
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While European gas production is dwindling, the situation is markedly different over in America. This state of affairs resonated with chemical giant INEOS, which, in response, hatched a pioneering plan to bring US ethane gas to Europe: a virtual pipeline across the Atlantic, giving the continent the chance to benefit from US shale economics, which did so much to revitalise the country’s manufacturing industry. The company has since secured 15 year contracts for purchase, distribution and shipping. At the heart of the plan, which has seen more than US$2 billion worth of investment, lie the Dragon ships – a fleet of eight highly advanced, sustainable vessels, and the largest, most flexible multi-gas carriers ever built.
2016 has without doubt been a milestone year for INEOS’ grand scheme. In early March the 180 m INEOS Intrepid (part of the Dragon fleet) left the Marcus Hook deepwater terminal near Philadelphia bound for Rafnes in Norway, carrying 27 500 m3 of US shale gas ethane. On 23 March, INEOS confirmed the vessel’s arrival at the Rafnes petrochemical plant. Jim Ratcliffe, INEOS’ Chairman and Founder, stated: “This is a strategically important day for INEOS and Europe. We know that shale gas economics revitalised US manufacturing, and for the first time ever Europe can access this essential energy and raw material source too.”The project includes a connection to the 300 mile Mariner East pipeline from the Marcellus shale in Western Pennsylvania to the Marcus Hook terminal, with new export facilities and storage tanks. To receive the gas, INEOS has built the largest two ethane gas storage tanks in Europe at Rafnes in Norway and Grangemouth in Scotland. The company will use the ethane in its two gas crackers at Rafnes and Grangemouth, both as a fuel and as a feedstock.
Fast forward to September, and INEOS, along with Enterprise Products Partners, made another big announcement. The first cargo of ethane to be exported from Enterprise’s Morgan’s Point terminal in Texas was loaded, and the INEOS Intrepid set sail on 1 September en route to the Rafnes facility. The Morgan’s Point ethane export facility, which is the largest of its kind in the world, can load at a rate of 10 000 bbls/hr, provides INEOS with another supply route from the US, and will help to secure the growing international demand for supplies of US ethane from shale, improving diversification and offering a competitive raw material for the global petrochemical industry. Supply for the terminal is sourced from Enterprise’s natural gas liquids fractionation and storage complex in Mont?Belvieu, Texas, and transported through a new 18 mile, 24 in. diameter pipeline that was completed in February 2016. The Mont Belvieu complex is also connected to the Marcellus and Utica shale regions through the ATEX pipeline. On 22 September, the US Energy Information Administration (EIA) confirmed that the US Gulf Coast ethane shipment had arrived in Europe.
Back to the present and another major milestone is imminent. At the time of writing, the INEOS?Insight is four days away from its scheduled arrival at Grangemouth, Scotland, on 27 September, carrying 27 500 m3 of ethane from US shale fields. This, also, is a first for the UK and signals the beginning of a new era for the domestic industry, marked by more competitive fuel costs. The gas will replace dwindling North Sea supplies, secure essential raw material for Grangemouth and support thousands of manufacturing jobs in Scotland and the UK.
This has certainly been a success story so far, and the future of the project looks bright. INEOS could well have found a way to provide Europe's manufacturing industry with a much needed boost, bringing jobs and added security along with it. Long may it continue!