Camille - Monday, October 17, 2016

There’s been great news for the UK polythene industry over the past few weeks. The first shipment of US shale gas was delivered to the Grangemouth petrochemical plant in Scotland; securing the future of the UK’s polythene industry.

polythene industry

Operations at Ineos’ Grangemouth site have been falling since the North Sea supply began to dwindle. With costs rising and supplies being cut, the plant closed many of its manufacturing operations; making the supply of polythene volatile. With the introduction of this virtual shale gas pipeline, the future of the Grangemouth site looks much more positive. The plant will now be able to run at its full capabilities and refine the gas into the raw material that we use to make polythene packaging and supplies.

What is the virtual pipeline?

8 tankers are in constant motion across the Atlantic; carrying shale gas between the US and the UK. With the end destination being the shores of Scotland where the gas can be transported to the Grangemouth site in Falkirk. Ineos, the company behind the Grangemouth refinery, has signed a 15-year contract to receive gas from the shale fields in America.

The North Sea oil and gas supply has been dwindling for some time and the rising cost of polythene has resulted in a reasonable level of uncertainty in the market. In the polythene industry, we’ve seen the cost of our raw materials rise and fall over the years. The certainty of the US gas supply will hopefully mean that the prices will level out and we may potentially see a reduction in the cost of raw materials in the future.

The importance of what Ineos do at the Grangemouth site lies in the end product. The gas isn’t burnt to create power, energy or electricity. Ethane is removed from the gas to create polymers that are turned into plastic pellets. It’s these pellets that are used to create the polythene products that we supply at Excelothene.

This is a brand new resource for the country and means the UK’s polythene industry has been secured for the foreseeable future.

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