Petrochemicals giant INEOS has struck a deal to supply ethane from US shale gas via the new £450 million import terminal at Grangemouth.

It has signed a long term deal with ExxonMobil and Shell to secure ethane for the Fife Ethylene Plant (FEP), which has an annual capacity of 830,000 tonnes, from mid-2017.

FEP is owned and run by ExxonMobil while Shell has 50% capacity rights.

Ethane gas is a vital raw material needed to produce ethylene which is used to manufacture a broad range of products across the UK and exported to Europe and other world markets.

Geir Tuft Business Director at INEOS O&P UK said: “This is a landmark agreement for everyone involved. 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.”