Governments in Holyrood and Westminster have confirmed details of the support measures they have provided to Ineos – the Swiss-based global petro-chem and refining conglomerate – to help keep its Grangemouth plant in operation.
Last week, Ineos announced the plant would be closed permanently because of lower-cost base competition from globally-based rivals using US-sourced shale oil gas as their processing feedstock.
As part of its survival package, the company also required its workers to accept cuts to their final-salary pension scheme and to agree to a ‘no-strike’ clause.
In addition, the UK government has now extended a £125 million loan to Ineos to help it finance a £300 million investment in Grangemouth to build a new terminal to import shale oil gas from the USA.
The Scottish government has also indicated it would support Ineos’ application for a £9 million grant to support its planning application for the shale gas terminal.
Sourcing shale gas from the US will cut Ineos’ processing feedstock costs by around 30% – even after shipping costs. Industry analysts say that this a huge competitive advantage to the more highly-taxed ethane from the North Sea oil fields.
Meanwhile, Holyrood MSPs on the Scottish Parliament’s Energy committee will tomorrow (29 October) ‘discuss the latest developments at Grangemouth and what action (if any) it wishes to take’.