Ineos confirms Grangemouth petrochem site shutdown by 2017 unless significant action is taken

23-Sep-13

Ineos’ Grangemouth plant is likely to be shut down in the next three years if it continues losing over £100 million every year, as per Ineos chairman of Olefins and Polymers Europe, in The Falkirk Herald. The main reasons for the massive losses are the decline in North Sea petrochemical feedstocks and the site’s pension scheme deficit of £200 million, two issues Ineos is now working to address. Mr Maclean said: “The plant has to become more cost effective. Ineos has invested £1 billion in the Grangemouth site since 2006, but over the last three years the whole site has been losing around £150 million annually and that is forecast to continue. The feedstock gas from the North Sea is declining. Though this is a modern asset, it continues to run at 50% because of the lack of feedstocks. Lack of alternative feedstock to supplement the North Sea supply will result in the petrochemical side of the business not continuing beyond 2017. Ineos are looking to source shale gas from the USA to solve this problem and get the cracker operating at 100%, but this would require an investment of £150 million to prepare the site for that feedstock and a further £200 million to offset the losses while the required new tanker facility is being built.