UK: US Shale Gas for Europe Ineos Europe and Rex Energy Agree on Purchase of Natural Gas Liquids

Editor: Alexander Stark

Ineos Europe and Rex Energy announced a new natural gas liquids sale and purchase agreement covering ethane, propane and butane from the Appalachian shale gas basin.

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Lyndhirst/UK – The natural gas liquids will be transported through the Mariner East infrastructure and exported by sea from Marcus Hook to Ineos’ European cracker complexes. The transportation of ethane begins already in April 2016. Shipment of propane and butane begin following the completion of Mariner East 2 pipeline in 2017.

“This contract adds to our supply portfolio providing for long-term sourcing of advantageously priced US natural gas liquids for our European crackers. We are excited about our new business relationship with Rex Energy and look forward to future opportunities between our companies,” said David Thompson, CEO Ineos Trading and Shipping.

Rex Energy is an independent oil and gas exploration and production company operating in the Appalachian and Illinois Basins within the United States.

“With the new sales agreement, we will now have three different outlets to deliver our natural gas liquids volumes, both domestic and international. The new outlets will enhance the economics of our wells in the Butler Operated Area and our overall resource potential,” said Tom Stabley, President and Chief Executive Officer of Rex Energy.

On March 23, the Ineos Intrepid, had arrived at its petrochemicals plant at Rafnes in Norway, carrying 27.500 m3 of US shale gas ethane. This was the very first time that ethane from US shale gas had ever been exported from the USA and the first time it has been imported into Europe.

The project has been complex- involving the design and long term charter of all eight Dragon class ships (which will collectively create a virtual pipeline across the Atlantic), connection of the new 300 mile Mariner East pipeline from the Marcellus shale in Western Pennsylvania to the Marcus Hook deep water terminal near Philadelphia, and the creation of new export facilities and storage tanks.

The American gas exporter has invested $ 2 billion to bring US shale gas to Europe.

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