Petrochemicals manufacturer Ineos has announced it will become to first supplier of US ethane from shale gas to China.
The deal with SP Chemicals – who will deliver the ethane – is a long-term supply agreement and the first of its kind in terms of ethane from shale gas being shipped to China.
The deal involved the construction of a ship with a 95,000cbm capacity, due to be ready by 2019.
The ship is known in the US as a VLEC, which stands for ‘Very Large Ethane Carrier’ and is being built in China under the instruction of the JACCAR Group.
Ethane can be used to make ethylene, which can be used as a raw material to make products for the transportation, construction, textile and electronic markets.
David Thompson, CEO of INEOS Trading and Shipping, said: ”This is another world first for Ineos after importing shale gas to Europe in 2015. By bringing in US ethane from shale gas to China for the first time, we are now leading the way in shipping ethane worldwide to meet the needs of an expanding chemicals sector. We are excited to work with a client such as SP Chemicals and we look forward to delivering this historic project.”
Chan Hian Siang, CEO of SP Chemicals, said, “SP Chemicals is honoured and very happy to work with Ineos, a first-class global company, to ship ethane over a journey of more than 18,900 km across the Pacific Ocean from USA to Taixing City, Jiangsu province, PRC.
“It has long been a dream for SP Chemicals to integrate upstream. SP Chemicals will commission a gas cracker plant in 2019 to produce 650,000 tons per annum of ethylene. This first long-term supply agreement for ethane with Ineos will be an important milestone for SP Chemicals to achieve self-sufficiency for its ethylene requirements.”