Communicator

Grangemouth oil refinery officially closes after 100 years in operation. Photo credit: yahoo

Grangemouth Refinery Halts Operations: Transition to Import Hub, Calls for Policy Reform, and Strategic Implications for Scotland's Energy Sector.

The end of crude oil processing at Scotland’s Grangemouth refinery marks a pivotal moment for the nation’s industrial and energy landscape. Petroineos, a joint venture between INEOS and PetroChina (CNPC), confirmed in late April 2025 that the site would transition from refining to serving as an import terminal for finished fuels, following sustained financial losses and mounting competition from larger, more efficient refineries abroad. This closure brings an end to more than 70 years of refining at Grangemouth, with the loss of around 400 jobs and significant concern for the local community, which has long depended on the site for stable employment and economic security

The decision has been met with regret and frustration by many in Scotland, including the Scottish Government, which described the closure as premature and detrimental to both the economy and the country’s transition to net zero. Workers and unions have voiced deep concerns about the lack of consultation and the adequacy of transition plans, fearing a repeat of the economic decline seen in other former industrial communities. While some government support for retraining and local investment has been pledged, the loss of Grangemouth’s refining capacity is widely seen as a blow to the region’s industrial fabric and a test of policymakers’ commitment to managing the energy transition responsibly.

Against this backdrop, INEOS Chairman Sir Jim Ratcliffe has been outspoken in his criticism of the UK’s energy and environmental policies. Ratcliffe argues that high energy costs and carbon taxes-particularly those imposed under the UK Emissions Trading Scheme (ETS)-are “squeezing the life out of” British industry and making it uncompetitive globally. INEOS faces a £15 million bill for carbon emissions at Grangemouth for 2024 alone, a cost Ratcliffe says is forcing the company to pause critical investments in green projects and efficiency upgrades. He warns that such policies risk accelerating deindustrialization, citing energy bills that are 400% higher than those in the US and double the European average. “This is not just INEOS; this is a reality for British manufacturers across the nation: carbon taxes and soaring energy costs are suffocating the industry,” Ratcliffe said. He has called for a fundamental rethink of the UK’s approach, urging, “Give us competitive energy costs, give us the incentives to invest in new assets and to play our part in building a strong sustainable industrial future,” emphasizing the need for entrepreneurial freedom and lower taxes to allow the energy sector to function and invest in decarbonization.

Strategically, the closure of Grangemouth means Scotland will now import all of its motor fuels, relying entirely on international supply chains to meet domestic demand. This shift increases exposure to global market fluctuations and supply risks, reducing the country’s energy self-sufficiency. While Petroineos has emphasized that the new import terminal will safeguard fuel supply for Scotland, the loss of domestic refining capacity leaves the nation more vulnerable to external shocks and diminishes its leverage in shaping fuel standards and supply terms. In effect, Scotland’s energy security and industrial autonomy have been significantly lowered, underscoring the far-reaching consequences of the Grangemouth closure for both the local community and the wider Scottish economy.

#petroineos  #grangemouth  #refinery  #refining  #ineos  #cnpc  #petrochina  #plantclosure  #carbontax  #energytransition  #netzero  #ratcliffe 

TECHNOLOGIE ALREADY OPERATING

Coal Gasification
▪️Startup Date: August 2015 (Phase I), July 2021 (Phase II)
▪️Plant Capacity: Supports total methanol production of 2×1.8 million tons/year
▪️Technology Provider: Yanchang Petroleum (integrated proprietary technology)
▪️Feedstock: Coal
▪️Products: Synthesis gas (syngas)

Natural Gas Steam Reforming
▪️Startup Date: August 2015 (Phase I), July 2021 (Phase II)
▪️Capacity: Integrated into methanol production capacity
▪️Provider: Proprietary integrated technology by Yanchang Petroleum
▪️Feedstock: Natural gas
▪️Products: Synthesis gas (syngas)

Rectisol Gas Cleaning
▪️Startup Date: August 2015 (Phase I), July 2021 (Phase II)
▪️Capacity: Integrated into methanol production capacity
▪️Provider: Proprietary integrated technology
▪️Feedstock: Raw syngas from coal gasification and natural gas reforming
▪️Products: Purified syngas for methanol synthesis

Methanol Synthesis
▪️Startup Date: August 2015 (Phase I), July 2021 (Phase II)
▪️Capacity: 2×1.8 million tons/year
▪️Provider: Yanchang Petroleum proprietary integrated technology
▪️Feedstock: Purified syngas (coal-based and natural gas-based mixed syngas), DCC hydrogen-rich gas
▪️Products: MTO-grade Methanol

Methanol to Olefins (DMTO)
▪️Startup Date: August 2015 (Phase I), July 2021 (Phase II)
▪️Capacity: 2×600,000 tons/year
▪️Provider: Proprietary DMTO technology
▪️Feedstock: Methanol
▪️Products: Ethylene, Propylene

Residual Oil Catalytic Thermal Cracking (DCC)
▪️Startup Date: August 2015
▪️Capacity: 1.5 million tons/year
▪️Provider: Institute of Petroleum Technology (Double riser technology)
▪️Feedstock: Residual oil
▪️Products: Olefins, Naphtha, Light Diesel

Veba Combi Cracking (VCC) Plant
▪️Startup Date: Operational since 2015
▪️Capacity: 450,000 tons/year
▪️Provider: KBR/BP alliance
▪️Feedstock: FCC slurry oil and coal slurry
▪️Products Made: Naphtha, ultra-low sulfur diesel (ULSD)

Polyolefin Units
▪️6 sets of polyolefin units (operating or scheduled) totaling 1.9 million tons/year.
▪️High-Density Polyethylene (HDPE): 300,000 tons/year
▪️Linear Low-Density Polyethylene (LLDPE):300,000 tons/year
▪️Polypropylene (PP): 600,000 tons/year

Near-zero Wastewater Discharge System
▪️First phase started July,20,2014; upgraded in October,2020.
▪️Capacity: Phase I initial design scale 876m³/h – 
Phase I expansion to 1300m³/h▪️Feedstock: Industrial wastewater, domestic sewage, rainwater
▪️Products Made: Recycled water, sodium sulfate salt, sodium chloride salt

TECHNOLOGIES CURRENTLY UNDER CONSTRUCTION OR IN PROJECT PHASE

Naphtha and Light Diesel Comprehensive Utilization Project
▪️Estimated Startup Date: End of March,2024
▪️Plant Capacity: Naphtha hydrorefining unit – 250,000 tons/year, Light diesel hydrorefining unit – 200,000 tons/year, Olefin raw material refining unit – 250,000 tons/year, Heavy aromatics adsorption separation unit – 200,000 tons/year.
▪️Technology Provider: Heavy aromatics adsorption separation technology provided by CNOOC Tianjin Chemical Research and Design Institute Co., Ltd.
▪️Feedstock: Naphtha and light diesel produced as by-products from DCC unit.
▪️Products Made: Benzene, toluene, mixed xylenes, aromatics.

Low Density Polyethylene and Copolymer Plant
▪️Startup Date: License secured September 24, 2024.
▪️Capacity: 150,000 tons/year.
▪️Technology Provider: ECI Group
▪️Technology: Proprietary hybrid reactor high-pressure polymerization technology developed from ICI autoclave technology.
▪️Feedstock: Ethylene with co-monomers such as vinyl acetate (for EVA) and butyl acrylate (for EBA).
▪️Products Made: LDPE (packaging films, coatings), EVA (adhesives, solar encapsulants), and EBA (sealants, specialty applications).

Methanol Gasification Slag Comprehensive Utilization Project
(No explicit startup date provided)

MTBE Unit Low-temperature Heat Utilization Project
(In progress; no explicit startup date provided)

Coal Gasification Conversion Condensate Environmental Protection Comprehensive Management Project
(Currently in project/research stage; no specific startup date provided.)

Methane Conversion Air Preheater Upgrade Energy-saving Project
(Currently in project/research stage; no specific startup date provided.)

Photovoltaic Power Generation Project
(Currently in project/research stage; no specific startup date provided.)

Carbon Capture Utilization and Storage (CCUS) Demonstration Project
(Currently under development; no explicit startup date provided.)
▪️Plant Capacity: 360,000 tons/year CO₂ capture and storage
▪️Technology Provider: Proprietary CCUS technology developed by Yanchang Petroleum Group.
▪️Feedstock: CO₂ emissions from coal chemical enterprises.
▪️Products Made: Enhanced oil recovery through CO₂ flooding and underground storage.

ADDITIONAL RELEVANT TECHNOLOGIES MENTIONED BUT WITHOUT EXPLICIT OPERATIONAL STATUS OR DATES PROVIDED

These technologies are mentioned as part of the company's comprehensive utilization strategy or future plans without clear operational status or startup dates explicitly indicated:

C₄ Mix to Olefin Conversion Unit (OCU) (mentioned implicitly as part of the olefin downstream processing chain)

C₅ Mix Recycling (implied as part of comprehensive utilization but not explicitly detailed with dates or capacities.)

Coal-Methane Co-gasification Technology (mentioned as a future planned project without explicit details on dates or capacities.)

Propane and Isobutane Dehydrogenation for Acrylic Acid and Esters Production (mentioned as planned projects without explicit details on dates or capacities.)


#coaltoolefins  #gasification  #methanol  #dmto  #methanoltoolefins  #dcc  #fcc  #catalyticcracking  #vcc  #vebacombicracking  #polyolefins  #netzero  #mtbe  #sustainability  #ccus  #ocu  #olefinconversionunit 

Dutch TTF Gas March 25 (TGH25) Price Chart (€/MWh)

Yara's Hull Plant Mothballing Highlights Europe's Ongoing Energy Challenges

The recent announcement (on 7 February 2025) of Yara International's decision to mothball its Hull ammonia plant in the UK, which has an annual capacity of 300,000 metric tons represents a striking example of how Europe's energy crisis continues to impact industrial production.

This decision is part of a broader strategy to reduce European ammonia production by 1 million metric tons due to high natural gas feedstock costs and the impact of European carbon policies.

The Hull plant closure, likely permanent, reflects the challenges faced by energy-intensive industries in Europe, where elevated energy prices and regulatory pressures have significantly eroded competitiveness.

The Natural Gas-Fertilizer Connection

Fertilizer production, particularly nitrogen-based fertilizers, is
inextricably linked to natural gas prices. Natural gas serves not only as an energy source but also as a key raw material in the production process. Through the Haber-Bosch process, natural gas (methane) is converted into hydrogen, which then combines with nitrogen from the air to produce ammonia – the building block of nitrogen fertilizers.

When natural gas prices surge, fertilizer production costs increase dramatically, as gas can represent up to 80% of the production costs for nitrogen fertilizers. This direct relationship makes fertilizer plants particularly vulnerable to gas price volatility.

The Chain of Events: Europe's Energy Market Transformation

The current situation stems from a series of significant changes in Europe's energy landscape:

Europe took the decisive step of sanctioning gas imports from Russia altogether, forcing a dramatic restructuring of its energy supply chains. This led to a rushed transition toward liquefied natural gas (LNG) from distant suppliers like the United States and Qatar. However, LNG proves significantly more expensive than pipeline gas due to the complex processes of liquefaction, oceanic transport, storage and regasification.

Germany's decision to accelerate the dismantling of its nuclear power plants set an early precedent for increased gas dependency in Europe's largest economy. This shift put additional pressure on the continent's gas supplies and grid stability.

The situation intensified when the Baltic states decided to cut
themselves off from the Russian power grid on 9 February 2025, leading to significant spikes in regional electricity prices. This was preceded by Ukraine's decision to halt gas transit through its territory on 1 January 2025, which had been a crucial pipeline route for Russian gas reaching European markets.

New U.K. Tax Rates Are Hammering North Sea Oil And Gas Drilling

In the UK, the situation intensified in October when the UK government raised the Energy Profits Levy (EPL), commonly known as the windfall tax, from 35% to 38%. The United Kingdom currently imposes one of the world's highest tax burdens on offshore oil and gas production, with operators in the North Sea facing a total tax rate of 78% resulting from the combination of standard taxation and the EPL.

The policy has created a challenging environment for the UK's domestic energy production, Britain now paying the highest electricity prices in the World.

Norway's Gas Threat: A New Risk to Europe's Energy Security

Norway, a critical supplier of natural gas to Europe, has recently hinted at potential disruptions to its energy exports due to domestic and geopolitical pressures. Currently providing nearly half of Germany's gas supply, Norway has become indispensable for European energy security following the decline of Russian gas imports.

However, soaring electricity prices in Norway—six times the EU average—have sparked domestic backlash, with political parties advocating for reduced energy exports to prioritize national affordability. Additionally, technical failures, such as the January 2025 shutdown of Norway's Hammerfest LNG plant, have already tightened Europe's strained energy supply.

These developments highlight Europe’s vulnerability to disruptions in Norwegian gas flows, further exacerbating its ongoing energy crisis.

European Decarbonization Policies

Both the EU and the UK are undergoing significant transformations in their energy landscapes as part of ambitious decarbonization policies aimed at achieving net zero emissions by 2050. The EU’s European Green Deal and legally binding Climate Law, alongside the UK’s Clean Power 2030 Action Plan and Emissions Trading Scheme (ETS), have driven renewable energy adoption and reduced reliance on fossil fuels.

The measures have significantly impacted energy prices across Europe. Investments in green technologies, carbon pricing, and restrictions on fossil fuel use have increased costs for industries and households alike.

In the UK, phasing out coal power and limiting new oil and gas licenses have heightened dependency on renewables and imported energy, raising concerns about energy security.

Deindustrialization in Europe: The Impact of Surging Energy and Gas Prices

These rising costs are placing heavy financial pressure on energy-intensive industries across Europe and the UK, accelerating trends of deindustrialization, exacerbated by geopolitical tensions, net zero energy policy decisions, and the reduction of Russian gas supplies.

Energy-intensive industries, such as chemicals, steel, and aluminum, have been particularly affected, with many companies curbing production or relocating to regions with lower energy costs like the U.S. or Asia. Yara's decision to close its Hull ammonia plant is only the latest in a long list of industrial failures across Europe.

#naturalgas  #deindustrialization  #europe  #fertilizer  #ammonia  #lng #ttf

LyondellBasell today announced the formal launch of a strategic review of the European assets of its Olefins & Polyolefins and Intermediates & Derivatives business units. The assessment will evaluate the assets through the lens of the company's strategy to Grow & Upgrade the Core, Build a Profitable Circular and Low Carbon Solutions Business, and Step Up Performance & Culture.

"At the 2023 Capital Markets Day, we stated our intent to concentrate our portfolio around businesses with long-lasting competitive advantage and to reinvest around those advantaged areas generating superior returns at meaningful scale," said Peter Vanacker, LyondellBasell chief executive officer. "These criteria have not changed."

The company's investments in a commercial-scale MoReTec plant, LyondellBasell's proprietary technology to convert plastic waste into liquid raw materials, and the development of a circularity hub in the Cologne, Germany region will continue as planned. LyondellBasell will also continue to invest and leverage its differential technology position as a key enabler to grow and upgrade the core asset base.

"The company will prioritize its investments to align operations with our circularity and net zero ambitions," Vanacker added. "We understand that strategic assessments can create uncertainty for our employees and customers, but we are committed to operate our assets safely and reliably throughout this process."

Source: LyondellBasell Corporate & Financial News, 8^th May 2024

#olefins #polyolefins  #europe  #assets  #circularity  #netzero  #plasticwaste