An Indian conglomerate that has ties to the Marcellus shale wants to ship 1.5 million tons of ethane annually from the United States to a chemical complex in its home country, a move that could set up competition for supplies with plants under consideration in the region.
Reliance Industries has two joint ventures in the Marcellus, where companies are separating ethane from the abundant natural gas, among the U.S. shale investments it could tap to supply its upgraded cracker plant.
“Reliance’s investments in shale gas and its existing crackers portfolio in India are a natural fit for sourcing ethane from North America and shipping it to India to attain long term feedstock competitiveness,” the company said in a release.
In 2010, Reliance invested $392 million in Houston-based Carrizo Oil & Gas Inc.’s operations in the Marcellus. It also joined forces with Chevron as part of that company’s acquisition of Atlas Energy’s stake in the Marcellus. Reliance had a $1.4 billion investment in its venture with Atlas.
Reliance did not identify which shale sources will provide the ethane for shipment.
Spokesmen for Reliance, Chevron and Carrizo could not be reached.
Carrizo increased its gas production in Pennsylvania during the first six months of the year by more than 10 million cubic feet over the last six months of 2013, making it the 14th-largest producer with 74 active wells in the state, according to the latest production reports. Chevron’s 224 wells produced the 10th-highest amount of gas this year.
Opponents of exporting gas and related products fear it could strain supplies and increase prices in the United States. A glut of gas in Appalachia has depressed prices.
Reliance did not identify the export terminal from which it will start shipping ethane at the end of 2016.
Sunoco Logistics hopes to move ethane and other gas liquids from Marcellus and Utica shale wells to its Marcus Hook export terminal outside Philadelphia by upgrading its Mariner East pipeline.
A spokesman for Sunoco said it does not comment on potential customers.
Royal Dutch Shell is considering whether to build a petrochemical cracker plant beside the Ohio River in Beaver County at a former Horsehead Holding Corp. zinc smelter site. And Brazilian company Odebrecht is exploring a competing cracker near Parkersburg, W.Va.
Both Odebrecht and Shell have not decided whether they will build their crackers, but they have been arranging supply commitments from drillers.