1ST American Gas arrives in Blighty

[Mega]

http://www.dailymail.co.uk/news/arti...entalists.html

Shipping Gas to Scotland...............hmmm............Northsea production down a bit?

Mike

[GRG55]

Re: 1ST American Gas arrives in Blighty

http://www.dailymail.co.uk/news/arti...entalists.html

Shipping Gas to Scotland...............hmmm............Northsea production down a bit?

Mike

This is ethane being imported to supply the two ethylene petrochemical crackers at Grangemouth (manufacturing input material for plastics production).

A few years ago Ineos was telegraphing it was going to close down this petchem plant:

http://www.itulip.com/forums/showthread.php/26176-Northsea-oil-GAS-running-out

From 10-23-13

Grangemouth is a commodity chemicals plant. It has two ethylene crackers, one of which can use either a gas or liquid feed (ethane, propane or naptha) and one which can only use gas. The ethylene that is produced is a fungible commodity, and these sorts of petrochemical plants are DEEP cyclical businesses that compete worldwide on manufacturing cost (the ethylene produced is the same stuff everyone else produces).

With a world economy that has not really recovered from the financial crisis, the European economy mostly in the toilet, global growth slowing, Chinese petrochemical capacity installed in the last 20 years competing with high cost European suppliers, ethane and propane supply coming from the extraction processes upstream of a growing number of Middle East and Asia LNG plants, and now the USA and Canada becoming the cheapest place on earth for gas (ethane and propane) energy supply, it means that Grangemouth ethylene is too expensive in a very price sensitive industry. The loss of some local gas supply from the North Sea means having to import feedstock for the plant, and that means they have to take that extra cost out somewhere in the manufacturing process because they cannot raise the price of their output commodity chemical product or their customers will just buy it from somewhere else.

The commodity petrochemical business is brutal. Makes good money at the top of the business cycle and loses money for everyone but the very lowest cost producers at the bottom of the cycle. Every time. What is happening now is that lower cost capacity is being installed in the USA and higher cost capacity is being knocked out elsewhere...including China which also has to import some of its feedstock.

Apparently at least part of it is still running.

[Mega]

Re: 1ST American Gas arrives in Blighty

Indeed................but it also reflex the lack of Northsea production.

Mike