Home Oil and Gas U.K.’s richest man shrugs off Brexit with €3 billion petrochemical investment

U.K.’s richest man shrugs off Brexit with €3 billion petrochemical investment

by Business News Report

Britain’s richest man, billionaire Sir Jim Ratcliffe, has shrugged off fears of a paralysis of U.K. business by spending €3 billion to build a petrochemical plant in Antwerp, Belgium. Ineos, his privately owned chemical firm, and one of Britain’s biggest companies, announced the investment this afternoon (U.K. time) just hours before a critical vote in parliament on Britain’s divorce from the EU divorce. The company had previously said it was picking a country in Europe for the location of its multibillion-euro project for an ethane gas cracker but had not identified which one.

The €3 billion investment is the largest investment in the European chemicals sector in 20 years and could be a game changer for the Belgium economy. Ratcliffe’s latest investment comes despite warnings that uncertainty around Brexit have paralysed British firms and caused them to stop expanding, making investments and hiring staff. The new petrochemical complex will be co-located with Ineos’ existing sites in Europe making polymers and will be connected by pipeline to a number of Inoes ethylene and propylene units. Ratcliffe said: “Our investment in a gas cracker . . . is the largest of its kind in Europe for more than a generation and is an important development for the European petrochemical industry. We believe this investment will reverse years of decline in the sector.”

Ratcliffe built the firm from nothing having bought up unwanted chemical divisions from firms such as ICI, BP and BASF and used these operations to process byproducts that oil and gas giants couldn’t use. When oil and gas comes out of the ground 90% of it is used to power homes and fuel cars, but the remainder is unsuitable. But Ratcliffe takes this 10% to make plastics such as polyester, PVC and polystyrene which can be used for drinking bottles, car bumpers, suitcases and clothing. He has created a virtual pipeline using ships to transport cheap gas from America to Europe. Ethane from the North Sea is expensive because it is scarce. It is so cheap in America it is cost effective for Ineos to buy the ethane there and build an actual pipeline linking it to a processing plant by the U.S. coast and then spend $1 billion on eight ships made in China.

The ships then take the gas, which has to be frozen to -90C so that it can be transported in a liquid form, across the North Atlantic to his plants in Europe. Only today John Allan, president of the Confederation of British Industry warned the U.K. will face a “national emergency” and a rejection of a deal with the EU would cause “irreparable harm”. But the CBI, which has called for the U.K. to stay in an EU customs union for the long term, has previously been criticised over its anti-Brexit campaigning.


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