Barnett Shale

Swiss firm moves to ship Marcellus ethane overseas

Ineos Group AG, a Swiss chemicals manufacturer, has contracted with a Danish shipbuilder to transport ethane from a Philadelphia-area terminal to its petrochemicals plant in Norway. The deal impacts Fort Worth-based Range Resources, which last year agreed to supply ethane, a component of natural gas, to Ineos from a facility in Marcus Hook, Penn., starting in 2015. Range is one of the largest producers in the Marcellus Shale, a fast-growing field in the Appalachians. Range last year committed to be the anchor shipper of natural gas liquids on the Mariner East Project, running from southwestern Pennsylvania to Marcus Hook. on Wednesday, Ineos said it will buy an undisclosed number of liquefied natural gas (LNG) tankers from Evergas of Copenhagen, Denmark, to transport the ethane to an Ineos facility in Rafnes, Norway. Ethane can be processed into ethylene, a basic feedstock in the production of plastics.

-- Jim Fuquay

 

Magnablend to be acquired by Univar

Magnablend, a Waxahachie-based chemical company that became a big supplier of chemicals for hydraulic fracturing, has agreed to be acquired by Univar, based in Redmond, Wash. Magnablend in October 2011 suffered a spectacular fire that destroyed its facility near U.S. 287 and Interstate 35E. In January the company bought 135 acres and a 214,000-square-foot building at the site of the former superconducting super collider, which was shuttered  19 years ago.

In announcing the sale, the companies said Magnablend's sales will top $400 million in 2012. Univar last year had $9.7 billion in sales. Terms were not disclosed.

"The acquisition of Magnablend is an important step forward in Univar's continued focus on the rapidly-growing North American oil and gas market,"  Univar CEO Erik Fyrwald said in a prepared release. "Magnablend's geographic position at the heart of current and developing shale basins allows us to offer a comprehensive suit of products and services to meet increasing customer demand." Magnablend was founded in 1979, and besides energy-related products it packages root stimulators, specialty fertilizers, animal nutrients and commercial cleaners. and is headed by CEO Scott Pendery, who said the companies are a good fit and will provide "enhanced services for our customers, better geographical coverage and improved economies of scale."

-- Jim Fuquay

 

 

Texas Gulf Coast petrochemical boom sparks concerns

The Texas Tribune, the not-for-profit news organization whose content is regularly included in The New York Times and picked up by other media, has a report on what's being called the biggest expansion of the U.S. petrochemical industry since the 1980s. It's expected to create thousands of jobs, but also will add to water use and air emissions worries. The report is here.

-- Jim Fuquay

Exxon to expand Baytown chemical production

Exxon Mobil says it plans to add petrochemical production capacity at its Baytown complex to take advantage of inexpensive domesticl natural gas. The Houston Chronicle's FuelFix blog has a report here.

-- Jim Fuquay

Natural gas oversupply -- two perspectives

Everybody agrees there is a current glut of natural gas in the U.S., but not everybody agrees on the right response to it. About 2,000 industry members attending the Hart Energy conference in Fort Worth on Wednesday heard one producer and a consultant advocate pursuing numerous measures to boost demand, including exports, while a big user, Dow Chemical, cautioned against the use of government subsidies to accelerate new demand, such as natural gas-fueled vehicles and coal-to-gas switching at electrical utilities. Ken Bromfield, U.S. commercial director at Dow, said his company just committed $4 billion to new facilities, including a new ethylene plant in Louisiana, based on abundant natural gas supply and low prices, which he said give U.S. chemical producers and manufacturers a big advantage over European and Asian competitors. Rather than push exports of liquefied natural gas (LNG), Bromfield said, "I'd rather export it as value-added products." John Harpole, president of Mercator Energy and a consultant who said he works with both buyers and sellers of natural gas, countered that there's enough gas to do all of the above and still keep prices relatively low.

Several participants agreed that producers have not been inclined to sign long-term contracts at today's $2 price level, the lowest in a decade, although Harpole said he thinks producers' willingness to deal long-term is growing as it appears the glut will prove longer-lasting. David Hill, vice president of Natural Gas Economy at Encana, said a big user that wants to lock in supply at low prices can do so by committing the money to take an interest in production, as one steel company has done. "It's happening," Hill said of such arrangements. The conference ends today.

-- Jim Fuquay