Ineos commits £1bn for North Sea oil pipeline and other facilities
Image credit: Dreamstime
Chemical company Ineos has announced it will invest £1bn in the UK to prolong the life of the North Sea’s main oil and gas artery in addition to other manufacturing ventures.
The biggest investment being announced is for the Forties Pipeline System (FPS), for which £500m will be invested to extend the life of the pipeline by at least twenty years into the 2040s.
The money will be used to overhaul the reliability of the 500km pipeline, which includes modernising the environmental systems.
£350m has been allocated for a new steam and power plant at Grangemouth that will deliver “significantly improved energy efficiency and long-term reliability”.
An additional £150m will be used to construct a 300,000 tonne per year VAM (Vinyl Acetate Monomer) plant in Hull.
VAM is a key component in a wide range of products, including laminated windscreens, toughened glass, adhesives, coatings, films, textiles and carbon fibre.
Sir Jim Ratcliffe, Ineos founder and chairman, said: “Ineos is a supporter of British manufacturing and this £1bn investment underlines our confidence in our business in the UK. These investments will ensure that our UK assets continue to be world-class for many years to come.”
The investment will come as some relief to the UK Government, which has seen many companies, most recently Nissan, abandon manufacturing plans in the UK largely related to concerns over Brexit.
Last week, Greg Clark, the business secretary, said that leaving the EU without a deal will be a “disaster” for the UK and its manufacturing sector.
Opened in 1975, the FPS is capable of transporting up to 600,000 barrels of North Sea oil onshore for refining every day. The pipeline currently transports 40 per cent of the UK’s oil and gas to the mainland.
Andrew Gardner, chief executive of Ineos FPS, said: “North Sea oil and gas producers are telling us that they want to be in the North Sea well into the 2040s, so we are making this commitment to be there with them.
“Following acquisition of FPS in 2017, we are now embarking on a period of investment that will guarantee that the system can support them for decades to come.”
Commenting on the Grangemouth investment, Tobias Hannemann, of Ineos, said: “This investment forms part of our wider plans to secure a bright future for manufacturing at Grangemouth and will continue its renaissance as a world-class petrochemicals site while supporting the refinery, FPS and wider UK economy.”
Around 300 jobs will be created building the new plant in Hull and it will employ around 30 people when it is operational.
Ineos asked the Government for financial support towards the project, but to date has not received anything. Group director Tom Crotty told the Press Association: “We are still in debate.”
Ineos has had a long history of trying to begin fracking activity in the UK. In January 2018 the company sought a legal challenge against the Scottish Government relating to a ban on the industry.
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