INEOS unveils €2bn expansion in Europe

INEOS is investing €2bn (US$2.2bn) to expand its European petrochemicals capacity, in a move taking advantage of cheap US shale gas.

The plans, announced yesterday, include a new propane dehydrogenation (PDH) plant and the expansion of ethylene plants at Grangemouth in Scotland and Rafnes in Norway to over 1m t each. A number of locations are being considered for the PDH plant, including Antwerp in Belgium, which will produce 750,000 t/y of propylene for INEOS units across Europe.

INEOS currently produces nearly 4.5m t/y of ethylene and propylene across the continent, but is also the region’s largest buyer of the chemicals, as feedstock for manufacturing other chemical products such as PVC and urethane foams.

Jim Ratcliffe, founder and chairman of INEOS and IChemE Honorary Fellow, said: “Collectively, it’s the equivalent of building a new world-scale cracker in Europe.

“It has only been made possible because of INEOS’ massive US$2bn investment in our Dragon Ships programme, which allows us to import ethane and LPG from the US in huge quantities,” he added.

The Dragon Ships programme is INEOS’ plan to create a ‘virtual pipeline’ to bring ethane and propane derived from cheap US shale gas across the Atlantic. Consisting of eight ships, the programme made its first delivery to Grangemouth last September.

INEOS has, in recent years, invested in upstream assets. In April it bought the Forties Pipeline System in the North Sea and the Kinneil Terminal from BP, along with associated pipelines and facilities. It also purchased 12 North Sea gas fields in 2015 to bolster the supply of energy and feedstocks for its refining and petrochemical operations.

Gerd Franken, CEO of INEOS Olefins & Polymers Europe, said: 'These expansions and new-builds will increase our self-sufficiency in all key olefin products and give further support to our derivative businesses and polymer plants in Europe.

'All our assets will benefit from our capability to import competitive raw materials from the US and the rest of the world.'

According to the BBC, around 150 will be created at both Grangemouth and Rafnes, once the expansion of processing units is completed in three to four years' time.