New Market For U.S. Shale Gas Opens In Europe
Swiss petrochemicals giant Ineos Group Holdings SA plans to accept the first American shipment of a type of shale gas to Europe on Wednesday—a milestone that marks the opening up of a new market for American energy producers trying to sell a glut of the fuel.
The ship is carrying a type of natural-gas liquid known as ethane that was extracted from the Marcellus Shale in western Pennsylvania, where companies such as Range Resources Corp. and Consol Energy Inc. have been looking to diversify the markets for their ethane because of pipeline and storage limitations.
The shipment is the first seaborne export of ethane to Europe from the U.S., Ineos said, another sign of how the North American shale boom has transformed the global energy map.
The recent ramp-up in U.S. shale oil production has challenged Saudi Arabia’s sway over international oil markets, while an earlier shale-gas boom sent prices to record lows and upended coal’s dominance in the power sector.
“We know that shale-gas economics revitalized U.S. manufacturing, and for the first time Europe can access this important energy and raw material source too,” said Ineos Chairman and founder Jim Ratcliffe. [...]
Ineos’s shipments from the U.S. are underpinned by a 15-year contract with Range Resources, one of the most active drillers in Pennsylvania, and Consol Energy, another independent exploration-and-production company drilling in the Marcellus Shale.
Both companies, and many of their peers, are struggling as declining energy prices have cut their revenue and share prices in recent years.
Ethane has been among the worst-performing commodity markets, and the companies have spearheaded an effort to ship it to new customers on the Gulf Coast, in Canada and abroad.
“Certainly new end-user markets for our products outside of the Appalachian basin are vital to” the industry’s growth, said Consol spokesman Brian Aiello.
Adding customers abroad would help stabilize U.S. producers, which could convince domestic buyers that they can count on rising supply, he added