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Ineos agrees shale gas deal with Shell and ExxonMobil

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A deal to supply energy giants Shell and ExxonMobil with American shale gas from the Ineos plant at Grangemouth has been hailed a “landmark agreement”.

The Fife Ethylene Plant (FEP) in Mossmorran will receive the ethane from US shale gas, which is obtained using the controversial hydraulic fracturing “fracking” technique, from the middle of 2017.

It comes after Ineos signed a long-term sale and purchase agreement with ExxonMobil, which owns and operates the FEP plant, and Shell, which has 50% capacity rights.

The FEP, which was officially opened by the Queen in 1986, was the first plant specifically designed to process natural gas liquids from the North Sea.

But the ethane, which will be transported from Grangemouth to Fife using an existing pipeline, gives it an alternative source of the gas, which it converts into ethylene, a chemical used in everything from plastic bags and anti-freeze to anaesthetics.

Those involved say the deal with help ensure the competitiveness of a major manufacturing facility in Scotland and secure skilled jobs.

Ineos has committed £450 million to construct the new ethane import terminal at its Grangemouth plant, with the company describing it as the most significant investment in UK petrochemical manufacturing in recent years.

Geir Tuft, business director at Ineos O&P UK, said: “T his is a landmark agreement for everyone involved.

“We know that ethane from US shale gas has transformed US manufacturing and we are now seeing this advantage being shared across Scotland.”

Karen McKee, vice president of ExxonMobil’s global basic chemicals business, said the deal “helps to secure additional feedstock for the Fife plant”.

Elise Nowee, general manager of base chemicals in Europe for Shell Chemicals, said: ” This agreement gives FEP access to the new infrastructure developed by Ineos and in so doing brings US advantaged ethane to FEP. The agreement will help us to meet the long-term needs of our ethylene customers.”

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