TGE to build Europe’s largest ethane tank for INEOS at Grangemouth

LONDON (ICIS)–INEOS has signed a heads of terms agreement with engineering firm TGE to build Europe’s largest ethane tank at its Grangemouth petrochemical site in Scotland, it said on Thursday.

The company also announced the closure of a small cracker and a butadiene extraction unit at the site. Closure of the 320,000 tonne/year nameplate capacity G4 naphtha cracker had not been expected until 2015.

The ethane will feed the company’s 700,0000 tonne/year nameplate capacity gas cracker (KG) on the site and be imported from North America to replace dwindling North Sea feedstocks.

The tank was expected last year to be capable of holding 33,000 tonnes of ethane. INEOS said on Thursday that the tank would have a capacity of 60,000 cubic metres.

Grangemouth will be a shale gas-based facility by 2016, INEOS said, adding that the move is essential for the site’s profitability.

INEOS said in January that feedstock availability from the North Sea for the KG cracker had reduced by 60% over the past 10 years and that the cracker had only been running at half capacity.

Construction of the ethane tank is part of a £300m survival plan for the site that INEOS agreed upon after a bitter dispute and lock-out of the Grangemouth workforce and the threatened closure of the site.

The ethane gas terminal will enable Grangemouth to compete over the longer term, the company said.

Two loss-making 1960s vintage plants at the site will close with immediate effect, INEOS added. These are the G4 ethylene plant and associated butadiene unit (BE3).

 “Both G4 and BE3 plants are no longer commercially viable. Both facilities date from the 1960’s and their closure is another key part of our survival plan. We are pleased to be able to redeploy all affected staff into other roles across the Grangemouth site as we focus on the future,” said the CEO of INEOS O&P UK, Harry Deans.

Eventual closure of the G4 cracker had been expected G4 cracker had been expected for some time although the cracker was not exepcted to close until the second quarter of 2015.

TGE is building a 17,000 tonne gas tank at the INEOS petrochemical site in Rafnes, Norway to store ethane from North America, bringing that site’s total ethane gas storage capacity to 30,000 tonnes.