INEOS secures £230m loan for new shale gas import facility at Grangemouth

Chemical plant
Source: DollarPhotoClub

Ineos has won a £230m loan guarantee from the UK Government to build a new terminal to import, store, and process ethane from shale gas in Grangemouth. The loan guarantee enables Ineos to raise financing on £230m to cover the cost of the import facility and storage tank at the site.

Ethane, derived from natural gas, is used to produce ethylene; the main source for production of plastics and fibre market.

European chemical industry is at a disadvantage when compared to American companies, which benefit from low-priced shale gas. The new Grangemouth facility will give INEOS access to cheaper natural gas from the U.S.

Ineos chairman Jim Ratcliffe said: “Without doubt, this is one of the most important projects of recent times in Scotland, with implications to be felt right across the UK, not only for employment but also for manufacturing in general.

“Our ability to import US shale gas underpins the future of manufacturing at Grangemouth and across many businesses in Scotland. It is a vital step towards preserving the long term future of the Grangemouth site and those businesses that depend upon its continued presence in Scotland.”

The ethane tank will be the largest in Europe and is central to company plans to import US shale gas. It will be built by specialist engineering company TGE Gas Engineering. By 2016, Grangemouth will be a shale gas-based facility, which Ineos said is essential if it is to compete in world markets beyond 2017.

In January 2013, INEOS set itself to become the world’s first US ethane exporter after signing a 15-year shipping agreement with Evergas for the transportation of ethane into Europe from the US Mariner East project. In May this year, it announced a deal with US producer Enterprise Products Partners for the supply of shale ethane from the company’s export facility on the Texas Gulf coast.

Commenting on the INEOS loan, Chief Secretary to the Treasury, Danny Alexander, said: “Over £1bn of infrastructure projects have now been brought forward as a result of the UK guarantees scheme and £36 billion worth of projects are pre qualified.

“The Grangemouth guarantee is fantastic news for Scotland’s economic future, and for the UK’s energy security.”

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