As officials in Ohio, Pennsylvania and West Virginia hope to attract multi-billion dollar petrochemical projects like the one Shell is considering in western Pennsylvania, European companies plan to sail much of the natural gas liquid across the Atlantic Ocean for cracking.
According to the U.S. Energy Information Administration's Natural Gas Weekly Update, Switzerland-based Ineos Olefins & Polymers Europe is going to ship ethane drawn from the Marcellus and Utica formations to feed crackers in Scotland and Norway, likely before the end of this year.
The federal energy agency said the ethane destined for the Ineos sites would first flow from the local region across Pennsylvania via the Sunoco Mariner East 1 pipeline to the Marcus Hook Industrial Center near Philadelphia. Ethane drawn from Range Resources' operations is expected to fill a portion of the 70,000 barrel per day capacity of Mariner 1 pipeline. Once reaching the Marcus Hook facility where the fuel can be processed, stored and distributed, ethane would be loaded onto ships destined for Europe.
"We need to take advantage of the significant shift in ethane availability triggered by the U.S. shale gas boom," said Mark Garrett, CEO of Borealis, a petrochemical firm based in Vienna, Austria. "In an increasingly challenging environment in Europe, this is an exciting opportunity to increase the competitiveness of our integrated polyolefins business."
Statements from both Borealis and Antero Resources show the firms reached an agreement to export 11,500 barrels of ethane daily drawn from Antero operations to fuel the Borealis cracker in Stenungsund, Sweden.
"The ethane contract with Antero Resources, in combination with the recently renewed North Sea-based ethane contract with Statoil, provides us with an ideal portfolio of sources balancing cost competitiveness and supply security," Markku Korvenranta, executive vice president for base chemicals for Borealis, said.
Borealis said the Antero agreement takes effect upon the start-up of Mariner East 2. The U.S. EIA believes this larger capacity pipeline should be operational before the end of 2016.
The administration said total U.S. ethane production grew by an average of 212,000 barrels per day from 2010 to March of this year. Moreover, industry leaders believe ethane yields from just the Marcellus and Utica could reach 590,000 daily barrels by 2020, which is up from none at all in 2012.
As the Europeans determine how to use the U.S. ethane, public officials in Ohio, West Virginia and Pennsylvania continue hoping companies will make multi-billion dollar investments to crack the product locally.
Royal Dutch Shell last week closed a $13.5 million deal to purchase southwestern Pennsylvania property where a multi-million dollar petrochemical plant may be built.
Shell has not made a final decision whether to build its plant on the site.
Skilled trades workers in Trumbull and Mahoning counties are among those who have been waiting for Shell's decision on the proposed cracker plant because of the jobs construction would create for the local workforce.
Shell officials have maintained that buying the property is a necessary step in gaining state permits to build an ethane cracker plant at the site about 25 miles northwest of Pittsburgh and about 60 miles southeast of Warren.
Shell proposes piping in ethane from natural gas wells and then chemically "cracking" the liquid fuel so it can be converted to polyethylene pellets used to make various plastic products.
Officials say if Shell goes forward with the plant, 400 to 500 operational jobs and thousands of construction jobs would be created.
Also, Thailand-based PTT Global Chemical and Tokyo's Marubeni Corp. announced tentative plans to build a $5.7 billion petrochemical complex in the Dilles Bottom area of Belmont County and West Virginia officials remain hopeful for the Odebrecht ASCENT Project, which would be built near Parkersburg, W.Va.
