SABIC is modifying the cracker at its Teesside operation in the UK to take advantage of cheaper shale gas feedstocks imported from the US to produce olefins and derivatives more competitively.
Using £9m (US$15m) of funding from the government’s regional growth fund, the chemicals major will convert its naphtha cracker to use ethane and is already building a cryogenic tank at its North Tees site to accept the imported feedstock. The project is set for completion in 2016.
The change follows an identical shift by Ineos last year to supply its cracker at its Grangemouth site in the UK with cheaper ethane feedstocks imported from the US. The firm warned it could not continue running the site competitively using dwindling North Sea gas supplies.
Sabic’s decision to convert its cracker – currently designed to produce 865,000 t/y of ethylene, 400,000 t/y of propylene, and 100,000 t/y of butadiene – will help to safeguard the 600 direct jobs and 400 contractors the company supports in the region.
“This project reflects Sabic’s strong determination to take advantage of cutting edge technology in creating new sources of competitive feedstock and energy that will allow the company to continue to build a sustainable business and deliver on its long-term vision,” says Yousef Al-Benyan, Sabic’s executive vice president for chemicals.
“Our long-term focus is to have a business that stays profitable not only in the European region, but across our global markets.”
The investment has been welcomed by Steve Elliott, CEO of the UK’s Chemicals Industry Association (CIA).
“It is the latest signal from a global company that we can make the UK the place for chemical businesses to invest,” he said in a statement. “Long may it continue.”