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Ineos pauses production at Hull plants over high UK gas prices
The company says UK gas is about twelve times costlier than in the US and plans to seek cheaper LNG from the US or wait for prices to fall, potentially affecting up to 1,000 jobs.
Ineos, led by billionaire Sir Jim Ratcliffe, is pausing production at three industrial plants in Hull, blaming high UK natural gas prices for making operations uneconomical. The BBC reports the firm said gas prices in the UK are twelve times higher than in the US, and eight times more expensive than the coal-based processes used by Chinese competitors.
Ineos Acetyls, a unit that makes key chemicals used in products ranging from food and medicines to explosives, says the move will affect up to 1,000 staff, including 245 who work directly at the site. The BBC understands workers across the sites will be kept on while Ineos looks to buy liquefied natural gas directly from the US at lower prices, a process that could take up to a year.
The disruption follows higher global energy costs, with the BBC citing supply concerns after an increase in tensions related to the US Israel war involving Iran. It said wholesale natural gas prices in the UK and Europe have almost doubled since July, and Ineos is asking the UK and EU for tariff protections against Chinese products.
At the Hull site, two plants have already been turned off and the third is set to follow in coming days. The BBC reports one facility produces acetic acid used in items like vinegar and paint, another makes acetic anhydride, a key ingredient in aspirin, and the third produces ethyl acetate for solvent uses and decaffeinating tea and coffee.
Latest closeNat gas $3.202 ▲8.0%|Coffee $272.20 ▼0.0%