Grangemouth shale gas import site selected
3 Dec 2013
Ineos Petrochemicals today confirmed it had selected the location of an ethane tank it plans to build as part of a US shale gas import facility at Grangemouth.
Having closed and then reopened the Grangemouth Petrochemical complex in October, Ineos is now pressing ahead with its “survival plan” of investing £300 million into the Scottish site.
The ethane tank and new terminal, which will account for £150 million of this investment, will allow Ineos to import shale gas from the US to supplement declining North Sea feed stocks essential for the Grangemouth site.
Once both the tank and terminal are completed Grangemouth will have the capacity to be the first chemical plant in the UK to receive US shale gases.
We can make Grangemouth a great Scottish success story
Ineos Petrochemicals UK chairman Calum MacLean
The firm says it is “fast-tracking” the development, with engineering design to be complete by end of Q1 2014 and long-term shale gas contracts currently under negotiation. Imports could begin as early as 2016.
“This investment is absolutely critical for Grangemouth,” said Ineos Petrochemicals UK chairman Calum MacLean.
“Without a second advantaged feedstock supply chain, the petrochemicals business is not sustainable beyond 2017. We are delighted to report that Ineos [is] making good progress on the project that will give Grangermouth a long-term sustainable future.”
The Grangemouth petrochemical site has lost approximately £150 million per year over the last three years.
Ineos’ £300 million survival plan for the site includes the import facility plus the capital to support site loses until the additional feed stocks arrive.
As part of this survival plan Ineos set up a consultation process with staff to reduce fixed costs, and submitted applications to the Scottish Government for a grant of £9 million and a loan guarantee of £125 million.
The chemicals firm is already set to be the first in Europe to import shale gases from the US, as it is close to completing a tank and terminal at its Rafnes plant in Norway.
“As we can see from our plant at Rafnes in Norway the ability to bring US ‘shale economics’ to Europe is fast becoming a reality,” added MacLean.
“By applying the same approach we can make Grangemouth a great Scottish success story.”
