BP earmarks £500m for investment in northeast UK

16 November 1998 00:00  [Source: ICB]

BP Chemicals has announced its medium-term European investment plan with £500m ($831m) of spending earmarked for northeast UK.

The sum, which includes third-party investment in combined heat and power plants in Grangemouth and Hull, also covers 110 000 tonne/year expansion of ethanol at Grangemouth and a 150km ethylene pipeline extension from Wilton to Hull.

BP will expand the KG cracker in Grangemouth to add 270 000 tonne/year to take total ethylene capacity there to over 1m tonne/year. BP plans to start construction of the ethanol plant shortly for completion in 2001.

The firm also plans a 151km pipeline extension of the Grangemouth to Wilton ethylene pipeline on to Hull. Ethylene from this will be combined with acetic acid production in Hull, which is currently being expanded from 700 000 tonne/year to 750 000 tonne/year to produce vinyl acetate monomer (VAM) and ethyl acetate. BP is building a 250 000 tonne/year VAM plant and 220 000 tonne/year acetate plant on the site to 'maximise synergies and reduce costs'. The VAM plant is scheduled for completion at the end of 2000 and will be based on BP proprietary technology. This offers the scope to more than double the capacity of a single reactor, according to BP (ECN 27 July 1998).

The investment in Hull will coincide with the end of the toll production agreement for VAM with EniChem. This is currently carried out at Porto Maghera, near Venice. Additionally, BP's 115 000 tonne/year VAM plant at Baglan Bay in south Wales will be closed once the Hull site is operational, probably in 2001. BP will close the 150 000 tonne/year ethanol plant at Baglan Bay as more competitive ethanol comes onstream in Grangemouth. These two moves will mean 150 job losses at Baglan Bay but will be offset by the addition of 225 jobs in Grangemouth and Hull.

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