Grangemouth LNG wins guarantee
17 Jul 2014
Ineos has received a £230 million loan guarantee from the government to support the financing of its liquefied natural gas (LNG) facility at Grangemouth.
The chemicals company plans to build an LNG import terminal and 60,000 cubic metre capacity ethane storage tank in order to use shale gas from the US as a feedstock for its petrochemicals complex.
Ineos this morning said that chief secretary to the Treasury Danny Alexander had written a letter confirming the loan guarantee, which will help the firm secure low cost financing for the project.
[The] loan guarantee is a critical element to ensure the long term future of the site
Ineos O&P UK CFO Gerry Hepburn
“The news that the UK Government is supporting our plans to build an ethane import and storage facility at Grangemouth with a loan guarantee is a critical element to ensure the long term future of the site,” said Ineos Olefins & Polymers UK chief financial officer Gerry Hepburn.
“We will use the loan guarantee to raise funds through a public bond issue. The proceeds of the bond will be used to fund the ethane tank project at Grangemouth. It will be very rewarding to see the renewal of the site starting to take shape as we begin construction work.”
The loan guarantee is unlikely to be the only form of government support the project receives: the Scottish government has indicated it will support the company’s application for a £9 million grant to help finance the project, which was granted planning consent in May.
Ineos today also announced that it had finalised contracts agreements with German engineering contractor TGE to build the Grangemouth ethane tank. TGE is already building an ethane import terminal for Ineos at its Rafnes plant in Norway.
US shale gas imports to Grangemouth have been targeted by Ineos to start as early as 2016.
Click here to watch a video about Ineos’ new facility at Grangemouth.
