Ineos shuts UK cracker ahead of plan

Spanish Market: Natural gas, Petrochemicals
27/03/14

Ineos has started permanently shutting down the G4 naphtha-fed cracker and butadiene plant at its Grangemouth site in the UK, a year ahead of schedule.

G4, which produces 340,000 t/yr of ethylene, and the 70,000 t/yr butadiene plant at the site will close down “with immediate effect,” Ineos said.

“We have moved (the closure) forward. The primary issue is feedstock supply. The decline in ethane and propane supply has been sharper than we thought at the end of last year,” Tom Crotty, chief executive of Ineos Olefins, told Argus.

Ineos had previously planned to shut G4 and the butadiene plant in the first half of 2015 as it struggled to cope with dwindling feedstock supply from the North Sea, spiraling costs and poor margins.

Ineos told employees today that it will be starting the closure process, with the affected staff to be redeployed to other parts of the business.

Production at the ethane-fed KG cracker, which has a capacity of 700,000 t/yr, will be ramped up while the G4 closure progresses, Crotty added.

KG has been running at just 50pc of its capacity late last year due to feedstock issues. “We were even struggling to keep it running at 50pc (this year). It was running below 50pc but high of 40s pc last month,” he said.

Ineos will be importing US ethane to feed KG, with the first gas expected in 2016.

“By 2016 Grangemouth will be a shale gas-based facility, essential for it to become a profitable business again," Ineos said.

The benzene extraction unit was closed at the end of 2013, as scheduled.

Ineos has chosen German engineering group TGE as the preferred bidder to build an ethane storage tank at Grangemouth. The ethane tank will be completed in 2016.

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