INEOS
Shale gas arrives at Grangemouth after delay / “Hugely important day” for the UK / Fewer fracking applications this year
Ineos' John McNally said he believes the shipments will turn Grangemouth "profitable overnight" (Photo: Ineos)
The much-anticipated supplies of US shale gas-derived liquefied ethane were landed at the new jetty adjoining the mammoth complex operated by Ineos (Rolle / Switzerland; www.ineos.com) at Grangemouth / Scotland on 28 September, a day behind schedule. As late as mid-week, the Swiss-based group’s main concern was not how long it would take the 27,500 m³ vessel to dock and unload at the site on the Firth of Forth, but who would be there to greet it. While chairman Jim Ratcliffe had repeatedly criticised the Scottish government for declining an invitation to be part of the welcome party, Ineos’ biggest nemesis turned out to be the unpredictable Scottish weather.

As many news outlets, which had prepared their stories in advance, hit the newsstands and airways and in the early morning hours reporting that the expensive cargo had unloaded, 50-knot winds had left the 180-metre tanker temporarily stranded in a Firth estuary. When the winds calmed, various dignitaries, journalists and, at some distance, scattered groups of anti-fracking protesters, were there to meet it. In his speech, Ratcliffe called the arrival of the shale gas – the first-ever shipment to the UK – “a hugely important day” for Grangemouth and the UK. He said it was the culmination of “a hugely ambitious project” that up to now has taken five years and cost the group USD 2 bn, including GBP 450m for the purpose-built 40-metre-high ethane tank capable of holding 33,000 t of liquefied ethane (Plasteurope.com has reported extensively).

Ineos will use the ethane to feed its 760,000 t/y gas cracker at Grangemouth, which it said has been operating well below capacity due to a shortage of fuel. Shipments of shale fuel arrived earlier this year at the group’s other major European petrochemical complex at Rafnes / Norway. In Grangemouth, executives waxed enthusiastic about the prospects the US supplies will offer its UK operations. John McNally, CEO of Ineos Olefins and Polymers, which operates the Scottish site, forecast that Grangemouth “will become profitable overnight.” Fed with the US ethane, McNally said the site’s cracker will now run at 100% of capacity, and Ratcliffe proclaimed, “Grangemouth is going to be here for the next 20 years.”

Both McNally and Ratcliffe stressed that the feedstock is sorely needed to replace the conventional gas from North Sea fields the chemical group sees as fast shrinking. Saving Grangemouth would help arrest or reverse the downturn in UK manufacturing, they said. The lack of fuel has been blamed for the losses run up by the Scottish operation Ineos threatened to close in the heat of a battle with labour representatives before the UK government agreed to provide a loan to keep the site open.

As the dragon ship sailed up to the Grangemouth jetty, the Ineos chairman said the US shipments would preserve 10,000 jobs in the region’s manufacturing sector. From the site on the Forth, which currently employs 1,300 people, the cracker will also supply the cracker operated by ExxonMobil and Shell at Mosmorran in Scotland as well as production facilities at Runcorn and Hull in England. It is also planned to invite other companies to invest at Grangemouth. With shale underpinning its European franchise, Ratcliffe said the group will “take its time” about where to invest next, while hinting that it might be the US.

Some saw the remark as a sideswipe at the Scottish government, which thus far has ignored the chemical producer’s calls to end its moratorium on fracking. Officials have said they will need until the end of this year to complete environmental and safety studies, which will be followed by a public consultation. Along with the Scottish National Party, which controls the regional parliament, the UK Labour party has now come out against the practice, echoing the stance its Scottish arm had taken earlier.

In view of widespread opposition to fracking in Scotland, along with the moratorium, Ineos director Tom Crotty said earlier this year that the group would first concentrate its shale gas operations on England. The group recently revealed, however, that it now intends to apply for only five drilling permits this year, rather than the 30 projects it had planned to pursue durning 2016. Tom Pickering, CEO of Ineos Shale, said its experts are still in the process of surveying potential sites but there are no plans to downsize the chemical producer’s original ambitions.

Although fracking was largely left out of the official remarks made at the ethane landing, environmental advocates seized the occasion to speak out anew against the controversial practice. Mary Church, head campaigner in Scotland for the organisation Friends of the Earth, urged the Scottish government to “act swiftly to ban fracking and start seriously planning for a fair transition to a low-carbon economy." The fact that Scottish public money is tied up in the Ineos project is “disgraceful,” she said. While Ratcliffe insisted in interviews with UK media that fracking is safe, as US authorities are tough on environmental offences, Scottish anti-fracking activists organised in Broad Alliance, a group representing local communities opposed to unconventional gas extraction, said this is not enough to prevent widespread pollution,

The activists pointed to the “relentless environmental damage” caused in the US by Ineos’ partners. Range Resources Corporation (Forth Worth, Texas; www.rangeresouces.com), the company charged with handling transfer of ethane supplies from Texas to the Marcus Hook facility of Sunoco Logistics Partners (Philadelphia, Pennsylvania / USA; www.sunocologistics.com), was fined USD 4.15m by the Pennsylvania Department of Environmental Protection in 2014 for polluting soil and groundwater. The company also agreed to pay a USD 1.75m settlement to the department for failing to keep proper records of the water it used over five years.
30.09.2016 Plasteurope.com [235201-0]
Published on 30.09.2016

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