INEOS to Ship US Ethane to China in 2019

U.K. chemicals firm INEOS said it has entered a long-term supply agreement with Singapore-based SP Chemicals to ship ethane from U.S. shale gas to China for the first time starting in 2019.

“This is another world first for INEOS after importing shale gas to Europe in 2015,” said David Thompson, CEO of INEOS Trading and Shipping. “By bringing in U.S. 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.”

The deal involves the construction of a 95,000cbm capacity Very Large Ethane Carrier (VLEC), which is expected to be the world’s largest ethane carrier upon its delivery in 2019. The VLEC will be built under the management of the JACCAR Group.

The Chinese-built vessel will be operated by EVERGAS, and will ship U.S. ethane more than 18,900 km across the Pacific Ocean to SP Chemicals’ new gas cracker facility currently under construction in Taixing China.

“It has long been a dream for SP Chemicals to integrate upstream,” said Chan Hian Siang, CEO of SP Chemicals, who said the company’s new gas cracker plant will produce 650,000 tons of ethylene each year. “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.”