INEOS’ ground-breaking decision to ship shale gas from America has paved the way for new investments on European soil.
These competitively priced raw materials will now be used in plans to expand production of ethylene and propylene for INEOS’ businesses in Europe.
Output from the new production will be used to feed INEOS’ derivative businesses, replacing ethylene and propylene currently purchased from other companies.
In all, nearly 2 billion Euro will be spent on major new petrochemical projects in Europe, with Belgium, Norway and Scotland all likely locations for significant investments.
“Without access to cost advantaged raw materials these investments could not be possible,” said Gerd Franken, CEO INEOS Olefins & Polymers North.
Work on expanding the crackers at Rafnes, Norway, and Grangemouth, Scotland, is expected to start in 2019 and, once built, could add up to 900kt to INEOS’ overall of ethylene production capacity.
In addition to the investments in ethylene, INEOS is also planning a new production facility to produce 750kt of propylene, with Antwerp in Belgium one of the possible locations.
“The use of competitive raw materials to increase the self-sufficiency of our European businesses will support our position in Europe and help to protect our businesses against pressure from imported products,” said Gerd. “This will become increasingly important as significant new capacities come on-line in the US over the coming years.”
The decision to expand capacity at Grangemouth is especially good news for the staff who, in 2013, had faced the prospect of the ethylene plant shutting due to dwindling North Sea gases.
“That was our only feedstock and we were running out of it,” said John McNally, CEO INEOS Olefins & Polymers UK. “At times the plant was running at 50% capacity.”
INEOS Chairman Jim Ratcliffe said that these would be the first substantial investments in the European petrochemicals industry in many years.
“Collectively, these investments are the equivalent of building a new world-scale cracker in Europe,” he said.
Pete Williams, Head of Investor Relations, said the investments, which could create up to 100 jobs in total, showed that INEOS was committed to maintaining a competitive manufacturing base in Europe.
INEOS currently produces almost 4.5 million tonnes of ethylene and propylene – the key building blocks for many petrochemicals – but still remains the largest buyer of both in the region.