INEOS announced the agreement with SP Chemicals for the delivery of ethane from US shale gas to China. The agreement will see US ethane from shale gas shipped to China for the first time.
According to the announcement by INEOS, this agreement will supply SP Chemicals with a long-term supply of ethane for its industrial production.
Furthermore, the deal will involve the construction of a 95,000cbm capacity ship which is expected to be delivered in 2019.
Namely, the vessel will be a ‘Very Large Ethane Carrier’ (VLEC) and it will be the largest ethane carrier in the world, shipping US ethane from shale gas to SP Chemicals’ new gas cracker facility, currently under construction in Taixing China, INEOS said.
The vessel will be operated by EVERGAS and it 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, INEOS mentioned.
Chan Hian Siang, CEO of SP Chemicals, stated: “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.”