THE UK Government’s £230 million loan guarantee for Grangemouth was critical in safeguarding the site’s future, says INEOS.
Without it, INEOS Olefins & Polymers UK would have found it more difficult to raise the money it needed to develop the site so that it could import ethane from US shale.
With it, INEOS was able to raise funds through public bonds for its £2 billion, world-first project, to ship ethane more than 3,000 miles to the UK and save thousands of Scottish jobs.
In September, that faith – that belief that INEOS could actually pull it off – was justified as the site welcomed the very first shipments from Pennsylvania.
But the arrival of INEOS Insight, which was carrying that precious cargo, leaves Scotland in a dilemma.
The Scottish Government contributed £8 million of public money to INEOS’ bold plans, knowing that without the U.S. gas to replace dwindling North Sea supplies, the loss-making petrochemical complex at Grangemouth would have closed.
But the Scottish Government has put in place a moratorium on fracking pending the results of an investigation into whether it is safe.
That moratorium, imposed by Nicola Sturgeon’s SNP, prevents INEOS, which has licences to explore and develop shale gas, from even testing the geology in Scotland.
As almost 400 people gathered to welcome the first shipment of US shale gas, no one from the Scottish Government was there.
Scotland’s Conservative Leader Ruth Davidson, whose colleague Secretary of State for Scotland David Mundell attended the event, said it reflected badly on the SNP.
“People in Scotland will find it hard to understand why Nicola Sturgeon seems happy for shale gas to be shipped across the Atlantic to be used in Scotland, but when it comes to extracting the gas itself, she finds it unacceptable here,” she said. “It is neither environmentally nor economically coherent.”
She added: “This development will safeguard thousands of Scottish jobs. By being there, it would have shown that the Scottish Government recognises the economic importance of shale gas and the wider Grangemouth facility.”
INEOS, which is now pursuing shale gas exploration in England, described the SNP’s absence as a disappointment but preferred to focus on the positives.
“This shipment of US shale gas safeguards thousands of manufacturing jobs in Scotland,” said Jim Ratcliffe, INEOS Chairman and Founder.