Its agreement with Singapore-based manufacturer SP Chemicals also includes another record – the construction of the first 95,000 cubic meter ethane carrier, the largest of its kind in the world.
The vessel, which will be delivered in 2019, will be operated by EVERGAS. The ship will be built in China under the management of the JACCAR Group, and it will carry American ethane to a new ethylene cracker in Taixing, Jiangsu province, about 120 nm river miles inland from Shanghai. Technip is providing the technology package for the 650,000 tonne-per-year plant. It will be China's first gas-cracking ethylene facility, and it will allow SP to produce the valuable plastics precursor from low-cost ethane and propane supplies.
"It has long been a dream for SP Chemicals to integrate upstream," said Chan Hian Siang, SP's CEO. "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.” Ethylene is needed to make vinyl chloride monomer (VCM), the building block for PVC plastic; as of December 2016, SP had an annual capacity of 135,000 tonnes of VCM.
North America has an abundance of ethane, thanks in large part to the success of modern hydraulic fracturing techniques. Ethane is recovered during the processing of “wet” natural gas, and with a growing supply of gas flowing from the Marcellus Shale and the Ohio Shale basins, American petchem firms have stable and inexpensive access to natural gas liquids. Ineos has been shipping low-cost U.S. ethane to under-supplied European plants for several years, and domestic petchem operators are rapidly building more ethylene crackers in Texas to take advantage of the price and availability of the gas.