Closures as Ineos advances Grangemouth recovery plan

ERJ staff report (PR)

Ineos has signed up TGE to build a new import facility at Grangemouth to bring in shale-gas ethane from the US, and has confirmed the closure of one of two crackers and a butadiene plant at the site.

The moves are part of a £300m (€362.95m) plan to restore the profitability of the Scottish refinery complex, which was on the brink of closure amid a bitter trade union dispute late last year.

TGE of Bonn, Germany, which is already building an ethane import terminal for Ineos in Rafnes, Norway, has signed a heads of terms for delivery of the project in Scotland, Ineos announced 27 March.

The new ethane gas ‘tank’ will be twice the size of the Norwegian facility and will remove the company's reliance on costly and dwindling hydrocarbon feedstocks from the North Sea, explained Ineos director Tom Crotty.

“Right now we are running our Grangemouth gas cracker at half rate because we havn’t got enough gas. It is not just that it’s expensive, it is just that there is not enough of it coming out of the North Sea,” Crotty said at a Chemical Industries Association press event in London on 27 March.

The Ineos executive went on to explain that feedstock costs were a far bigger issue for Ineos than energy prices, and highlighted the need to bridge the competitiveness gap between European and US chemical operations.

“The absolute price of gas is irrelevant to us: it is the relative price of gas around the world that determines competitiveness,” he said. “With European gas at $12-plus and US gas $4-minus, the big issue we have at the moment is that the differentials are so dramatic.”

With regards to the closure of the butadiene unit, Crotty said there had been a significant reduction in butadiene demand locally [to Grangemouth] and in the UK so “increasingly that plant was exporting and its competitiveness was under severe strain because of that.”

Ineos’ butadiene customers, he said, will now be supplied from other facilities, particularly the company’s Cologne plant which part of an integrated production set-up.