23 September 2013 12:31 [Source: ICIS news]
LONDON (ICIS)--INEOS would be keen to upgrade the infrastructure at its Grangemouth, UK site to allow the import of US shale-derived ethane, but the facility is insufficiently competitive to justify the investment at present, the chairman of its UK petrochemicals division said on Monday.
The company announced plans last year to upgrade its Rafnes, Norway site to allow the use of shale-derived feedstocks, but such an upgrade would be uneconomical at the Grangemouth site which remains loss-making, according to INEOS Petrochemicals UK chairman Calum MacLean.
MacLean warned last week that the Grangemouth petrochemicals business could close in 2017 if an arrangement to secure shale gas feedstocks for the site fails to be arrived at by the time of the expiry of its current arrangements with North Sea gas operators.
“The petrochemical business at Grangemouth has reached a crossroads. Unless we reform our cost base and secure a new source of raw materials the site will close in 2017, when our gas contract expires,” MacLean said.
Reiterating comments made by the company to ICIS last week, MacLean claimed that the site was losing £150m (€176m, $242m) per year at present and is currently posting a £10m monthly loss, weighed by an estimated pension deficit of £200m.
Pension costs are at 65% of salary, according to MacLean. The company has invested £1bn in the site since taking it over from BP in 2006, he added.
The new ethane take at the Rafnes site is expected to be operational from 2015.
($1 = €0.74, €1= £0.85, $1 = £0.62)
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