Grangemouth future ‘very difficult’ without Scottish shale – INEOS says

Grangemouth petrochemical plant
Source: Richard Webb @ Wikicommons

The newly-imposed moratorium on fracking in Scotland may make the future of the Grangemouth chemical plant “very difficult”, according to Gary Haywood, the chairman of Ineos Upstream.

Ineos Upstream is a division of the chemical giant INEOS; the owner of the Grangemouth facility and one of the key shale-gas players in the UK.

As recently as November 2014, INEOS announced an investment of £640 million in British shale gas exploration; a move that put it on the road to becoming the biggest shale company in the UK. At the time, INEOS’ chairman Jim Ratcliffe said that he believed that unconventional oil and gas “could revolutionise UK manufacturing” and bet hard on shale by buying a 51 per cent stake in Scotland’s only fracking exploration licence, covering 700 square miles in central Scotland.

INEOS’ long term plan for Grangemouth was to transition from feedstocks imported from the U.S. – the company set itself to become the world’s biggest ethane importer, once North American LNG facilities come online – to locally sourced shale gas and oil. These plans have now been put in serious jeopardy by the Scottish government, who imposed a moratorium banning fracking in the whole country.

Speaking to BBC News, Scottish Conservative energy spokesman Murdo Fraser – who in May last year rejected the Greens’ attempt to ban fracking in Scotland – said that it made “absolutely no sense” for Grangemouth to rely on shale gas from abroad, adding that shale gas had “revolutionised the US energy economy”.

He said: “This warning shows just how crucial it is for Scotland not to be left behind on fracking.”

Referring to the 2013 dispute with trade unions that almost led to the closure of the Grangemouth facility, with a possible loss of 800 jobs, Mr Fraser said: “This vital plant has already been to the brink in recent years – we should take action now to ensure it doesn’t return there any time soon.”

Commenting on the moratorium – which was imposed to allow time for a full public consultation on shale and a full public health impact assessment – a Scottish government spokesman said: “The consultation will allow everyone with a view on this issue to feed it into government.

“It is a logical next step in the careful and evidence based approach we have demonstrated to date, and is an example of our commitment to the community engagement which this government believes in.

“Industry bodies including INEOS and the UK Onshore Operators Group welcomed the opportunity to engage in the consultation and environmental organisations including Friends of the Earth Scotland and WWF Scotland also both welcomed the announcement.”

Following a vote rejecting full independence in last year’s referendum, Scotland is excluded from the Infrastructure Bill, which will regulate fracking in the UK, that is currently debated in Parliament. Full powers regarding fracking in Scotland will be devolved to Holyrood after the May General Elections.

Article continues below this message

Have your opinion heard with Shale Gas International

We accept interesting, well-written opinion and analysis articles of up to 1,500 words, that offer unique insights into the shale industry. The articles cannot be overtly promotional in nature and need to fit into at least one of our content categories.

If accepted, the article must be exclusive to Shale Gas International website and cannot appear on any other websites, publications, etc. Each article may contain up to three links to external websites relevant to the content discussed in the piece.

If you would like to contribute to Shale Gas International website, please contact us at: editor[at]mw-ep.com