Ineos eyes €2.7 Billion European Cracker
At a recent European business forum, Ineos director Tom Crotty hinted that the Swiss-headquartered group was considering building a new cracker in northwest Europe. On the first working day of July, Ineos announced the plans for its latest project, a €2.7 billion cracker and propane dehydrogenation (PDH) facility.
The capital investment would be not only the largest in Ineos’ corporate history but also “the largest in the European chemical sector in more than 20 years, said Jim Ratcliffe, the group’s chairman. Leveraging the accustomed superlatives, he said the cracker would be “one of the most efficient and environmentally friendly plants of its type in the world” and a “game changer” for the industry.
“Ineos is going from strength to strength. This new investment builds on the huge investment we made in bringing US shale gas to Europe and will ensure the long-term future of our European chemical plants,” Ratcliffe said in a statement
Without providing details, Ineos said both the cracker and the PDH plant “would benefit from US shale gas economics.” The location, to be determined soon, is likely to be on the coast of northwest Europe, it said. After a project team has weighed all options and management has greenlighted the plans, the project could be completed within four years.
Ineos said last year it had decided to increase the capacity of an existing European cracker. From the hints dropped about the new project, it seems likely that, given the right incentives and feedstock logistics, the new facility would be built at one of its sites currently being supplied with US shale gas-derived ethane. This would narrow the choices to Grangemouth, Scotland, and Rafnes, Norway.
Gerd Franken, chairman of Ineos Olefins and Polymers North, said the cracker project would increase his company’s self-sufficiency in all key olefin products and give further support to its derivatives business and polymer plants in Europe. “All our assets will benefit from our ability to import competitive raw materials from the USA and the rest of the world,” he asserted.
Crotty said earlier that Ineos is in talks with the UK government about investment aid for a VAM plant it wants to build at Hull, England, or Antwerp, Belgium as well as for its envisioned sport utility vehicle project.
Whether the Brexit-plagued British would have extra cash to subsidize a cracker seems less assured, observers said, speculating instead that tax relief could be a bargaining chip.
Ineos may also have found a powerful industrial co-investor. In announcing the go-ahead for the long-delayed VAM plant a few weeks ago, the group said this would be built in cooperation with a partner.