Under the terms of the deal, the Fife plant will be supplied with ethane from the US shale gas via an existing pipeline from Ineos’ £450m ethane import terminal and storage facility at Grangemouth, Scotland, from mid 2017.
The agreement is also expected to ensure the competitiveness of a major manufacturing facility in Scotland.
INEOS O&P UK business director Geir Tuft said: "US ethane from shale gas will provide an additional resource, supplementing domestic production from the North Sea.
"It will now be used by two of Scotland’s largest manufacturing plants helping to secure their feedstock supply for years to come."
ExxonMobil Chemical and Shell Chemicals Europe equally own and operate the Fife ethylene plant, which has an annual capacity of 830,000 tons of ethylene.
Ineos said that ethane from shale production is expected to provide raw material required to run UK steamcrackers at full operating rates to produce ethylene.
Shell Chemicals base chemicals Europe general manager Elise Nowee said: "This agreement gives FEP access to the new infrastructure developed by INEOS and in so doing brings US advantaged ethane to FEP.
"The agreement will help us to meet the long-term needs of our ethylene customers."
Image: The Fife plant will receive ethane from Grangemouth import terminal. Photo: courtesy of INEOS.
