The Courier & Advertiser (Perth and Perthshire Edition)
Ineos enters deal to turn site into shale gas plant
A £300 MILLION survival plan to turn Ineos’s embattled Grangemouth petrochemicals site into a shale gas plant reached a major milestone yesterday.
The company said it had entered into a head of terms agreement with contractor TGE to construct the critical ethane tank storage plant at the site on the Forth.
The firm is already working with Ineos on the construction of an ethane import terminal at a site in Norway.
Ineos said the project would also allow ageing site plant from the 1960s to be removed from the production process.
“These are very positive developments for Grangemouth,” Harry Deans, chief executive officer of Ineos O&P UK, said.
He said the ethane gas terminal was essential to Grangemouth’s long-term future as the company looked to replace dwindling North Sea feedstocks with shale gas imported from America.
“The ethane tank will be the biggest in Europe,” Mr Deans said.
“By 2016 Grangemouth will be a shale gas-based facility, essential for it to become a profitable business again.”
As part of the process of integrating the new ethane plant, Ineos said the site’s existing ethylene cracker (G4) and the associated butadiene (BE3) plant would be shut down.
These features date from the 1960s and Ineos said taking them offline would allow the company to concentrate on increasing the production from its more modern and efficient KG ethylene cracker.
The firm said all Ineos employees affected by the on-site change would be redeployed within other roles at the site.
“Both G4 and BE3 plants are no longer commercially viable,” Mr Deans said.
“Both facilities date from the 1960s and their closure is another key part of our survival plan.
“We are pleased to be able to redeploy all affected staff into other roles across the Grangemouth site as we focus on the future.”
The moves comes less than months after Ineos management announced it was closing the site following an increasingly tense stand-off with the Unite union.
The plant, which employs around 800 workers directly and thousands more in the associated supply chain, was only reprieved after workers agreed to accept the terms of a last-ditch rescue plan.
The new deal included a three-year pay freeze for employees, an end to the final salary pension scheme and other changes to terms and conditions.
It is anticipated the new ethane plant will be accepting imported fuel by early 2016.