The Way Forward
The Grangemouth site is undergoing a radical transformation with significant investment that will herald a new era in petrochemical manufacture.
With a history and rich heritage built upon shale oil refining dating back to the 1850s, the area around Grangemouth has been at the forefront of innovations and technology ever since – adding significant value and providing opportunities to fully utilise raw materials to manufacture a range of products that are commonplace in every aspect of modern life.
Since acquiring the Grangemouth site in December 2005 INEOS has invested more than £1bn in the plant and its infrastructure, improving the reliability and performance of the site.
More recently INEOS has committed to invest a further £450m into the Chemicals’ business at the site. It is the most significant investment into UK and Scottish petrochemical manufacture of recent times – demonstrating INEOS’ commitment to the Grangemouth site. A number of synchronised projects and activities are progressing at the site which when completed will position the Grangemouth site amongst the ‘Premier League’ of its peers.
In response to the 60% decline of North Sea Gas over the last 10 years, we had no choice but to source our basic raw material (ethane) from outside the UK. The Ethane Supply Project is one tangible element of the transformation programme at Grangemouth. Ethane from US Shale gas is providing sufficient raw material to run our manufacturing site at full rates, something that has not been possible for many years.
The successful delivery of the project is key to turning around the fortunes of the site and those companies and businesses that depend on our long term presence in Grangemouth together with the employees, customers and suppliers of those companies.
Today, Grangemouth site employs over 1300 people directly, generating 4% of Scotland’s GDP and exports goods worth £9bn per annum.*
*NB data includes JV with Petroineos
INEOS’ 20:20 Vision
We have developed a new investment strategy at Grangemouth. The strategy builds on our ‘20:20 Vision’ of modernising our manufacturing facilities, upgrading the infrastructure and delivering new opportunities associated with the new ethane feedstock. This vision seeks to protect the long term value and investment potential of Grangemouth, creating a global leading chemical and sciences manufacturing hub with the potential to become a Centre for Excellence and Innovation in Scotland. This will transform the Grangemouth petrochemical complex, securing competitive advantage and opportunity for new businesses and new manufacturers to relocate and invest on the site.
A key element in securing new investors and new businesses is the restructuring of the site and the creation of infrastructure and plots that are competitive with the major chemical sites in the UK and Europe. In 2016 we celebrated our new ethane facility becoming operational, securing the long term economic health of the site. With the continuation of our site regeneration programme and our security upgrades we will be able to offer a range of cleared and serviced sites ready for further investment that can compete for business across Europe.
In support of our Vision and masterplan for the site, a number of interpretation displays have been produced.
These displays provided our local community the opportunity at two townhall events in October 2016 to learn more about our 20:20 Vision and to provide us with feedback.
NEW BUSINESS HQ
During 2015 INEOS unveiled plans to build a new state of the art business HQ in Grangemouth as part of an ongoing investment in its 1,700 acre estate. In the space of just twelve months the construction phase was completed and the building keys handed over.
The new £20m building was designed by one of Scotland’s leading architectural practices, Michael Laird Architects, and was built by BAM Construction.
Providing high quality office space over four floors, for the first time in many years, the business at Grangemouth has now brought its employees together in a way that suits the new business operation. It will improve productivity and collaboration with a single office that is built for today’s business needs.
The HQ building includes meeting rooms and conference facilities located on the ground floor, and three floors of open plan office space above. The investment is good for INEOS and the local businesses that have benefited from the investment and the long-term, skilled jobs at the site. And along with the construction of the new building, INEOS is also undertaking a programme of clearing the site of old unused buildings and decommissioned plants.
Ethane Supply Project
Faced with the challenge of meeting a decline in gas from the North Sea, our key petrochemical feedstock (down 60% in the last 10 years) and with no additional raw materials currently available locally, the Grangemouth site is now benefiting from the significant investment of £450m by INEOS to build a storage facility and gas import terminal to bring in shale gas ethane from the USA. Even after factoring in the transportation costs of shipping the shale gas ethane across the Atlantic, it is providing a competitive source of sufficient raw material.
In addition, the quantity of US ethane being imported is now enabling the ethylene cracker (KG) at Grangemouth to return its throughput from less than half of its capacity to full rates.
The Grangemouth facility has one of only four gas crackers in Europe capable of using ethane gas to manufacture ethylene. The Grangemouth ethane supply project completed in Q3 2016 was identical to the one the company previously completed in 2015 at its Rafnes facility in Norway where INEOS had successfully invested in new infrastructure allowing it to bring in ethane gas from the USA.
To enable the site to import and make use of advantaged feedstock (ethane) from the North American shale gas fields, a 60 000 cubic metre ethane storage tank was constructed at the Grangemouth site. Together with associated import infrastructure including pipework and modifications to the existing jetty, this significant project was completed during 3Q 2016 and received support from the Governments in Holyrood and Westminster.
Over the course of the project lifetime, hundreds of jobs were created as contracts were tendered and awarded and more than 2 million work hours expended. These included contracts to build the ethane tank and the associated import terminal.
The project has returned the Grangemouth site to profitability helping to secure its long term operation, protecting the viability of its businesses and the many direct and indirect jobs that the site provides. Furthermore many manufacturing businesses across the UK can rely on high quality raw materials made in Scotland.
Long-term contracts (15 years) are in place with suppliers to pipe ethane from the shale fields in the US to purpose-built export facilities on the East and Gulf coasts of America. From here the gas is being shipped across the Atlantic in a fleet of eight specially designed Dragon-class ships commissioned by INEOS. These ships are delivering ethane to both Rafnes and Grangemouth.
Dragon Ships to Grangemouth
The inaugural delivery of US shale ethane arrived into Grangemouth on 28th September 2016. The fleet of eight Dragon ships has established a ‘virtual’ pipeline across the Atlantic from the shale gas fields in North America to Scotland’s largest chemical manufacturing site - enabling us to operate our ethylene plant at full rates.
These regular shipments from the US will provide on-going supplies of vital feedstock to our petrochemical plants and breathe life back into the Grangemouth site. Each Dragon Ship brings with it 27 500 cubic metres of liquid ethane at -90degC.
Ethylene is a key building block for the petrochemical industry and thereby critical to supporting the manufacturing industries in the UK. From the construction industry through to automotive, high-tech and high-spec industries, the ethylene manufactured by us in Scotland is used in almost every aspect of modern life. With out it, the world would be a much colder and darker place.