INEOS halts Wilhelmshaven cracker project

London - INEOS has suspended all further work on its planned new ethane cracker at Wilhelmshaven, Germany, citing a 30% hike in capital costs in the last 12 months, which have made the project economically unviable. The decision followed talks with project partners Statoil, E.ON Ruhrgas, INEOS added.

INEOS had planned to expand its operations at the site with a new ethane steam cracker, as well as a new membrane chlorine cellroom and major uprates to its existing VCM and SPVC plants. The cracker was to have sourced ethane from a gas separation unit to be constructed by Statoil and E.ON Ruhrgas in Dornum. 

The planned project also involved the construction an ethylene pipeline from Wilhelmshaven to the ARG pipeline in North Rhine-Westphalia.

"This is clearly a disappointing outcome for INEOS, the City of Wilhelmshaven and the State of Lower Saxony," according to INEOS chairman Jim Ratcliffe,  in an 18 Sept statement.

"All parties have invested considerable resources developing their projects since the original agreement between the three companies was made in August 2005. It is unfortunate that the recent increase in project related material and labour costs has had such a significant impact on the project economics that it became unsustainable," he said.