Engineering News

Ineos Plan Includes Ethylene Plant Closure
October 14, 2008

Oil refineries giant Ineos has entered union negotiations to close the G4 ethylene cracking plant at its Grangemouth site, affecting around 100 jobs.

It has also announced a GBP50 million plan to upgrade its other ethylene cracker, used for producing ethanol and propylene for plastics, and its butadiene plant, which is used in the production of synthetic rubber.

The investment comes five months after a pensions dispute at the company led to a strike that shut the Grangemouth refinery and the Forties pipeline that carries all UK oil and gas from the North Sea. The strike cost the company around GBP80m, and the two sides remain locked in negotiations over the issue .

Grangemouth general manager Gordon Grant said Ineos wanted to close its 40-year-old ethylene cracker because it depended on the oil product naphtha and was no longer viable given the price of crude, which fell to US$78 on Friday. The price of naphtha has tripled in two years.

"It is our intention to work with the employer representatives so that there are no redundancies. We will work to redeploy people on the site, " he said.

Pat Rafferty, Scottish organizer for the Unite union and key negotiator in the pension dispute, said it was too early to say whether the plant would close He said: "There's an element of truth to the argument that the fuel price has made the economics difficult at the plant, but the fact is G4 is coming to the end of its life cycle and has been getting reviewed on a year-to-year basis for a long time."

The Sunday Herald understands that, of the 100 staff, around 80 are technicians and the rest are administrators.

The investment news comes on the back of an existing GBP94m project to upgrade the gas-fed KG ethylene cracker to cope with heavier gases. The first part of the new investments is a GBP32m project to enable the KG plant to crack naphtha, while the second relates to extending the life of the butadiene plant.

Grant said the two new projects, part of a modernization plan, had yet to be approved by the Ineos head office.

Source: Newsquest Media Group, The Sunday Herald

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