INEOS Toasts Record €3.5 Billion for European Petrochemical Plant, Despite Energy Crisis
- 13-Feb-2023 11:17 AM
- Journalist: Nicholas Seifield
Europe: In a vote of confidence in the European petrochemical sector that has been affected by the energy crisis, INEOS has secured €3.5 billion in financing to move forward with a new, highly energy-efficient manufacturing site in Antwerp. Dubbed “Project ONE”, this cracker is anticipated to be the largest investment of its kind on the continent in recent history. Despite competitors such as BASF announcing permanent downsizing due to mounting energy costs, INEOS is confident that the project will remain economically viable due to its unparalleled efficiency and emission reduction capacities.
Despite warnings that the energy crisis triggered by Russia’s invasion of Ukraine could move capacity to Asia and the US, a major European petrochemicals and manufacturing project is confident in its ability to remain competitive. According to Jason Meers, chief financial officer of the project, “We believe in the future of Europe and the renewal of European industry. The reason securing financing is so important is, it’s showing that if you’re doing the right thing with the right projects, you can get backing. The project economics are sound.” To make this possible, €3.5 billion in financing will come from 21 commercial banks and export credit agencies of the UK, Spain and Italy - supported by a loan guarantee of up to €500mn from Gigarant (part of Flemish government).
INEOS has recently announced the installation of a new cracker at their existing facility in Antwerp. The facility will convert low-cost ethane from Natural gas production into Ethylene, which is an essential material used in the manufacturing of food wrappers, insulation, and other items. To make use of lower feedstock costs due to US shale boom, INEOS has created a fleet of 16 tankers over the past six years to transport ethane from the US to their plants in Europe. “We’re taking US energy economics and importing them into Europe,” Meers said. “That makes it extremely competitive.” European gas prices have dropped from their all-time highs, but they're still at an elevated level compared to pre-crisis levels. INEOS has stated that the plant could be powered by low-Carbon Hydrogen within the next decade, as long as plans for Hydrogen to become a larger part of Europe's energy mix are successful.