Borealis inks pact with US-based Antero Resources for ethane supply

In order to take advantage of the shale gas boom in America, Borealis, a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilisers, has signed a 10-year agreement with Antero Resources to supply ethane from the US for its flexible steam cracker in Stenungsund, Sweden. The project also includes a shipping agreement with Navigator Holdings and a related multi-million investment in an upgrade of the cracker and the construction of an ethane storage tank. The ethane supplied from the US complements the recently signed ethane supply contract with Statoil providing Borealis with an alternative attractive source of feedstock for its petrochemical plant in Sweden.
 
Antero Resources will supply ethane originating from the Marcellus and Utica shale formations to Borealis in Stenungsund. The company has signed parallel fractionation, pipeline and terminal service contracts to enable free on board (FOB) delivery at the Marcus Hook terminal operated by Sunoco Logistics. The first delivery of ethane is planned for late 2016.
 
A related long-term shipping agreement has been signed with US-listed Navigator Holdings, one of the largest owners and operators within the handysize liquefied gas carrier segment. For this purpose, Navigator will build a new, 35000 cbm state-of-the-art ethane vessel equipped with dual fuel engines. The vessel will be among the most modern in the world and will ensure cost effective, safe and reliable transport of ethane to Stenungsund.
 
The ethane supply coming to Stenungsund by ship will be stored in a purpose-built, fully refrigerated ethane tank. A lump-sum turnkey agreement has been signed with TGE Gas Engineering GmbH to construct the tank. In parallel, Borealis will also upgrade its steam cracker to enable increased ethane cracking.
 
Borealis’ cracker in Stenungsund is one of the most feedstock-flexible crackers in Europe. In addition to ethane, it can also crack naphtha, propane and butane. Stenungsund has significant liquefied petroleum gas (LPG) storage capacity, allowing the company to source LPG from various sources with vessel sizes ranging up to very large gas carriers.
 
“We need to take advantage of the significant shift in ethane availability triggered by the US shale gas boom. In an increasingly challenging environment in Europe this is an exciting opportunity to increase the competitiveness of our integrated polyolefins business,” said Mark Garrett, Chief Executive, Borealis.
 
Markku Korvenranta, Executive Vice President Base Chemicals, Borealis, said, “The ethane contract with Antero Resources in combination with the recently renewed North Sea-based ethane contract with Statoil provides us with an ideal portfolio of sources balancing cost competitiveness and supply security. This contract and the related investments underline our commitment to further strengthen our monomer position in Europe.”
 
Borealis’ olefins and polyolefins portfolio in Europe is built around integrated crackers and derivative complexes in: Porvoo, Finland; Stenungsund, Sweden; Kallo, Belgium; Schwechat, Austria; and Burghausen, Germany.
 
Borealis’ polyolefins capabilities position the company among the leading and most innovative suppliers to the polyethylene (PE) and polypropylene (PP) market in Europe.