The Fife Ethylene Plant will be supplied with ethane from American shale gas

Ethylene plant to use fracked gas from Grangemouth

Shell and ExxonMobile will use American shale gas from the Ineos plant in Grangemouth to make ethylene in Fife.

The long-term purchase agreement signed today between the three firms has been hailed as a landmark and will provide the Fife Ethylene Plant (FEP) in Mossmorran with an alternative source of ethane to natural gas from the North Sea.

Ineos has committed £450m to construct a new terminal at its Grangemouth plant to import shale gas extracted in the US by the controversial hydraulic fracturing method. It will start supplying FEP with ethane made from the American shale gas by the middle of 2017.

"This is a landmark agreement for everyone involved,” said Geir Tuft, business director at Ineos O&P UK.

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

Officially opened in 1986, the FEP plant was specifically designed to process natural gas liquids from the North Sea to make ethylene, a chemical used in everything from plastic bags and anti-freeze to anaesthetics.

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

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

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