Ineos AG, Switzerland, has secured a £230 million loan from the UK government that will allow the company to move forward with a planned upgrade at its 210,000-b/d Grangemouth, Scotland, refinery and petrochemical complex.
The loan guarantee will support the company’s effort to raise financing specifically to cover the building of an import terminal and storage tank at the Grangemouth site to store and process ethane from shale gas, Ineos said.
The company will use the loan guarantee to raise funds through a public bond issue, the proceeds of which will be used to fund the ethane tank project, said Gerry Hepburn, chief financial officer of Ineos Olefins & Polymers UK.
Following its March announcement that it had selected TGE Gas Engineering, Bonn, as the preferred bidder on the Grangemouth ethane tank build contract (OGJ Online, Mar. 28, 2014), Ineos said it has now finalized contract agreements with TGE for construction of the tank, which will have an ethane storage capacity of 60,000 cu m.
The first order for construction materials on the tank project already has been placed, the company said.
“Without doubt, this is one of the most important projects of recent times in Scotland, with implications to be felt right across the UK, not only for employment but also for manufacturing in general,” said Jim Ratcliffe, chairman of Ineos.
Ineos already has invested more than £300 million at Grangemouth as part of a long-term survival plan necessary for the site to manufacture petrochemicals beyond 2017, according to the company.
Ineos first announced the Grangemouth ethane terminal in February, at which time it was continuing to secure US shale gas supplies for its European cracking operations (OGJ Online, Feb. 17, 2014; Oct. 8, 2012).
“Our ability to import US shale gas underpins the future of manufacturing at Grangemouth, and across many businesses in Scotland,” Ratcliffe said.
Ineos previously signed a purchase agreement with Consol Energy Inc., Pittsburgh, for US ethane to be exported to Ineos’s European cracking operations in Grangemouth; Koln, Germany; Lavera, France; and Rafnes, Norway (OGJ Online, Feb. 17, 2014). Ethane will be transported through the Sunoco Logistics LP-operated Mariner East pipeline and terminal and imported by sea for use in Ineos’s European cracker complexes, with supplies scheduled to start from 2015.
Ineos signed an earlier long-term deal with Range Resources–Appalachia LLC to ship ethane out of the Marcellus area in western Pennsylvania to its European crackers through the Mariner East pipeline, also scheduled to start from 2015 (OGJ Online, Oct. 8, 2012).
The company also has reached an agreement with Enterprise Products Partners LP for ethane capacity at its recently announced ethane export facility on the Texas Gulf Coast (OGJ Online, June 12, 2014).
Additionally, Ineos has contracted with Evergas to expand an order for 150,000-200,000-bbl vessels designed to deliver US ethane to the company’s European plants to six from a previous four (OGJ Online, June 2, 2014). The ethane vessels currently are under construction in China, according to Ineos.
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