The future of the troubled petrochemical plant in Grangemouth took a giant step towards being secured this week after owners Ineos signed a new deal to import ethane gas from the USA.
The compound is an important raw ingredient in petrochemical products and acquiring additional amounts for cheaper rates will improve the competitiveness of the company’s European operations.
It’s a welcome shot in the arm for the Grangemouth facility that at one stage last year looked certain to permanently cease production following an industrial dispute caused by a serious breakdown in relations between Ineos and Unite the Union, which represents much of its workforce.
Swiss-based Ineos has already concluded one 15-year supply deal with Range Resources and has now finalised a second with Consol, one of the biggest US independent gas companies.
The switch from ethane extracted from the North Sea to cheaper US imports is said to be crucial to the Grangemouth plant’s survival. It amassed losses of £600 million in the last four years, according to the firm.
David Thompson, Ineos procurement director, said: “This contract adds to our supply of ethane providing for long-term sourcing of this essential raw material for our European crackers.
“It will also allow us to improve the competitiveness of INEOS’s production in Europe. “We are excited about our new business relationship with CONSOL Energy and look forward to future opportunities between our companies.”
Grangemouth MSP Angus MacDonald welcomed the news of the latest import deal. “It’s a definite step in the right direction,” he said.
“My understanding is that the ethane import contract is for 15 years, and it will go a long way to securing the long-term future of the petrochemical plant in Grangemouth.”