Drilling Down

Rex Energy Begins Export of Natural Gas Liquids

Share on Facebook0Tweet about this on TwitterShare on Google+0Share on LinkedIn5Pin on Pinterest0Email this to someone

STATE COLLEGE, Pa. – Rex Energy Corp. has signed a sales agreement with INEOS Europe AG to export natural gas liquids from the Marcellus shale formation and import these products to petrochemical complexes in Europe.

The purchase agreement covers ethane, propane and butane products originating from Rex Energy’s Butler Operated Area in Butler County, P.A., and will be transported through the Mariner East pipeline system and then shipped by sea to Europe.

“We are excited to begin this new relationship with INEOS,” Rex Energy President and CEO Tom Stabley said in a statement. “With the new sales agreement, we will now have three different outlets to deliver natural gas volumes, both domestic an international.”

Ethane shipments began this month, while propane and butane supplies will start with the completion of the Mariner East 2 pipeline in 2017.

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

INEOS said it has invested $2 billion to bring U.S. shale gas to Europe. Part of this investment involved the design and long-term charter of eight Dragon class ships, connection of the new 300-mile Mariner East pipeline from the Marcellus shale to the Marcus Hook deep-water terminal near Philadelphia, and the creation of new export facilities and storage tanks.

INEOS is the first company to establish seaborn intercontinental ethane transportation and has completed agreements with Sunoco Logistics for pipeline capacity and Range Resources for the purchase of ethane gas. INEOS is currently building an ethane terminal in Grangemouth, Scotland.

On March 23, the first shipment of U.S. shale gas reached an INEOS petrochemicals plant in Norway. It marks the first time American shale gas was exported from the U.S. and imported to Europe.

“Shale economics have revitalized U.S. manufacturing and has the potential to do the same for European manufacturing,” INEOS chairman and founder Jim Ratcliffe said in a statement.

Published by The Business Journal, Youngstown, Ohio.