While LNG exports from the US are hotly debated, major shale gas player Range Resources was recently excited to proclaim it will be the first company to export natural gas liquids via ship from the US. Range has an agreement in place to begin ethane shipments to a petrochemical concern in Norway beginning in 2015.
We have a sales VP in Europe now – they [NGL sales team] got a call from China and there’s interest in Pittsburgh,” Rodney Waller, Range Senior Vice President said at the Independent Petroleum Association of America’s Oil & Gas Investment Symposium held last week in New York.
“It’s really a matter of looking at the market to see where you get the highest netbacks,” Waller said.
Range has a large acreage position in the liquids-rich portion of the Marcellus and Utica shale plays and has been working hard to lock in sales agreements for those NGLs, which include petrochemical and other industrial feedstocks like ethane, propane and butane.
The company’s Mariner project provides “access to international markets and premium export pricing for future contracts,” according to a corporate presentation. Ethane and propane sourced from the Houston processing plant/fractionator located in southwestern Pennsylvania will be transported via pipeline west to Sarnia, Ontario and east to the Philadelphia docks.
Range also has booked capacity on the ATEX pipeline to Mont Belvieu, Texas where it has a contractual agreement for the offtake of 20,000 barrels per day of ethane set to commence in the first quarter of 2014.
Ray Walker, Range’s Chief Operating Officer and Senior Vice President told Breaking Energy his company has a deal with Ineos to deliver 20,000 b/d of ethane and 20,000 b/d of propane to facilities in Norway beginning in 2015.
“These shipping agreements are the final piece of the Mariner East Project, allowing INEOS to import competitively priced ethane to our Rafnes cracker from the US,” David Thompson, Procurement & Supply Chain Director at INEOS Olefins & Polymers North said in a statement.
Ineos has reportedly been using naphtha – a refined oil product – as feedstock at its Norwegian plant, so this deal is essentially a bet on the medium-term spread between US NGL prices and global naphtha/oil prices.
