INEOS has announced a long-term supply agreement with SP Chemicals to deliver ethane from US shale gas to China. The agreement, which will see US ethane from shale gas shipped to China for the first time, will supply SP Chemicals with a long-term competitive supply of ethane for its industrial production.
The deal will involve the construction of a 95,000cbm capacity ship which is expected to be delivered in 2019. Known in the US as a ‘Very Large Ethane Carrier’ or VLEC it will be the largest ethane carrier in the world, and will ship US ethane from shale gas to SP Chemicals’ new gas cracker facility, currently under construction in Taixing China. As with the INEOS Dragon ships, this vessel will be operated by EVERGAS. It will be the first VLEC in their fleet of 23 gas ships. The ship will be built in China under the management of the JACCAR Group.
Ethane is used to make ethylene - one of the world’s most important chemical building blocks. Ethylene is an important raw material used to make products for a wide variety of industrial and consumer markets such as transportation, electronics, textile and construction.
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.'
Jacques De Chateauvieux, Chairman of the JACCAR Group, said: 'This Contract illustrates JACCAR’s ability to offer a comprehensive solution with type C Tri-lobe VLEC tanks developed by JHW Engineering and Contracting, in co-operation with the Hartmann Group up to the contracting and operating by Evergas. We feel honoured by the trust of INEOS in us in delivering and operating the world’s largest VLEC with type C tanks.'
Steffen Jacobsen, CEO of Evergas, said: 'We are very pleased to further strengthen our relationship with INEOS co-operating on the seabourne transportation of Ethane from the US to China'.