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US shale gas plan to make Grangemouth profitable

Britain is to see its first deliveries of US shale-derived gas in 2016 when Ineos completes a £300m investment programme at its Grangemouth plant in Scotland.

The chemicals giant that had threatened to close Grangemouth in October after a bitter industrial dispute, has revealed a plan that will transform the economics of the loss-making site, making it almost instantly profitable. Central to the plan is the construction of new shipping and storage facilities to handle imports of ethane, which is 75pc cheaper in America due to the shale gas revolution. Ineos has agreed a long-term supply deal, spanning 15 years, with US oil and gas group Range Resources.

The import of cheap ethane will allow Ineos to run its KG chemical cracker at full capacity of 700,000 tonnes a year - twice the rate currently possible due to the decline in gas feedstocks coming out of the North Sea. Calum MacLean, chairman of Ineos’s Grangemouth site, said: Running the cracker at 100pc is the biggest single thing that will turn this business from loss-making to profitable.

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http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10489613/US-shale-gas-plan-to-make-Grangemouth-profitable.html