China to Invest in Petrochemicals from Coal Facility

photo : Total

Total and China Power Investment have announced that they will carry out a study into a possible 1 million-metric-ton-per-year polyolefins complex in China’s  Inner Mongolia region. The area has abundant supplies of coal, so feedstock will be readily available

Total and China Power aim to complete the plant in around 5 years, with an anticipated cost of  up to $4 billion to build.

The facility will use a coal to methanol process, together with the methanol-to-olefins technology and an olefins cracking process that Total has been testing in Feluy, Belgium.

Interesting move and one which reduces China's dependence on imported feedstocks. I don't know how this process compares economically but an abundant supply of low cost coal has to be an advantage, particularly with ethane supply becoming tighter in the Middle East and the link between naphtha and crude oil price.

Petrochemicals Manufacturing Excellence - Are You Ahead of The Competition?

In being successful, it is important to know just what your competitors are doing.

How well placed are they to deal with the new normal?

- Have they been taking action, like Lanxess, to better position themselves?

- Are they doing things in terms of product or process innovation that will leave them better placed for the future?

I know from my own experience, that it is very easy to become internally focussed, particularly during difficult times – but a level of external focus provides a very useful sense check and challenge to what you are doing.

How do your costs compare?

- Do you have industry benchmark data you can use?
- Do you know what they are doing to address challenges?

There’s a lot of information available and as you would probably expect me to say, you can always enlist the help of consultants to give you that external perspective.

Good luck!

Manufacturing Management in the New Normal

So we've already discussed the new normal  and its consequences, together with covered short and long term success factors, what I propose is a set of challenges, designed to assess just how ready is your organisation to deal with whatever the future holds.


Firstly let’s consider management

1) Do your managers understand the potential implications of the new normal?

By this I mean do they consider the economic outlook and are they identifying the various scenarios that might be created

2) Have your managers identified the things that they must be able to control in order to adapt to a changing situation?

This means having a highly capable AND highly flexible workforce, being strongly focussed on cost effectiveness and systematically eliminating all kinds of waste.

I would like to refer to the example of Lanxess. Last year Lanxess used the strap line ‘continuity meets flexibility’ for its 2008 annual report. Taking a quote from the report “The willingness to critically review our own strategies at regular intervals has played a crucial role in our company’s successful development. In view of the major challenges we now face, our reviews are becoming increasingly stringent.”

What Lanxess did was to actively implement a number of measures designed to give it the flexibility it needed to manage during the downturn.

Looking at the 2009 annual report and the comments of Axel Heitmann, the Lanxess Chairman states “Thanks to the numerous initiatives we implemented worldwide, we succeeded in keeping as many of our highly qualified employees in the group as possible, despite the crisis. We will need them urgently when the economy picks up again.”

He goes on to talk about flexibility of workforce, flexible asset management and reduction of expenditure.
In summary, he says “We are in an excellent position to emerge from the crisis a stronger company.”

I would consider that to be a very significant success.

Long and Short Term Critical Success Factors

Given the levels of investment in new capacity in recent years, it is apparent that petrochemicals manufacturers need a number of key attributes if they are to achieve long term success


• INTEGRATION

- large, integrated sites with access to advantaged cost feed stocks
- sites with all plant units within close proximity to minimise transport costs
- a unified management structure to minimise overhead
- cost optimisation models to squeeze maximum margin out of every molecule

• LOCATION

- coastal or river location with good access and excellent logistics facilities

• TECHNOLOGY

- reliable technologies
- robust technology with good on-going development support
- low cost (every penny/tonne makes a difference

• SIZE

- for first quartile plants, economies of scale are essential otherwise fixed costs per tonne of product produced are too high

• GLOBAL REACH

- recognising that major markets are shifting, producers need to be able to quickly move products to those markets offering the best returns

However these long term success factors are relatively static and whilst organisations should look to develop in this direction over time, it is also very important to consider short term success factors.


These short term factors all come down to what I would call ‘smart management’.

This means being able to identify potential issues ahead of time and develop strategies to deal with them.

The strategies will vary from one situation to the next, but I believe that all will require the highest levels of operational capability and by this I mean

• Flexibility - the capability to quickly and effectively respond to market volatility e.g. quick, safe and effective shut down, the ability to move turnarounds at short notice, swift rate changes and swift product changes

• Cost effectiveness – everyone in the organisation understanding that every penny matters AND working together to optimise costs

• Competitiveness – knowing what the competition is doing and being better than them e.g. innovation, workforce flexibility, logistics etc

Success in the New Normal

In my previous post, I referred to the 'New Normal' and what it might mean for petrochemicals producers. Today, I cover the question ‘what will success mean in this New Normal?’

We are very unlikely to see a repeat of the boom years of profitability, high operating rates and substantial capital investment.

So what success will mean is

• Firstly - Being ahead of the competition – across a balanced scorecard of key benchmark indicators as well as less tangible factors such as innovation and people development

• Being profitable and having monies to selectively invest in 'winner' projects

• Finally - Achieving sustainable improvements that leave you well positioned for the future e.g. innovation, organisational improvements, reliability etc.

So having defined success, the next question is 'how do we achieve it?'

Petrochemicals Manufacturing Strategies for the New Normal

Last week I attended the excellent Petchem Arabia conference, organised by the World Refining Association. The conference was very interesting and most valuable, giving an insight into the major issues affecting the future of the industry in the region.

My own presentation was 'Manufacturing Challenges for the New Normal'. Over the course of this week, I'd like to share some of my key themes.

The term ‘new normal’ was coined back in march 2009 by Bill Gross, founder of PIMCO, the California – based investment solutions provider. PIMCO was one of the few organisations that warned of the risks associated with the sub-prime housing bubble that drove economic boom years.

In terms of the economic recovery, PIMCO discredited the idea of a sharp rebound from recession and a rapid return to the activity levels of the boom years. Instead, they referred to a ‘New Normal’ which would bring lowered living standards, higher unemployment, stagnant company profits, heavy government intervention in the economy and disappointing equity returns.
So the key issues for petrochemicals manufacturers are

• End consumers are shifting from ‘needs’ to ‘wants’ significantly changing spending behaviour

• Financial crises, fears of ‘double-dip’ recession and fear of unemployment are driving these behaviours

• Temporary factors such as government stimulus packages have distorted demand but have not necessarily given a sustainable boost to the economies

So the net effect is increasing volatility and highly variable demand levels. And this is creating a major headache for manufacturers.

How to deal with this headache will be the theme of blog posts this week.

NiTech Solutions Wins ICIS Innovation Award

NiTech Solutions has won the prestigious ICIS Innovation award in the SME (Small/Medium size Enterprise) category.

As some may know, I do have a particular interest here - in my role as the Engineering Director with NiTech Solutions.

This award is fantastic news for an SME which is looking to make a breakthrough in the equipment market.


The picture shows the plant that won the award - installed with Genzyme, the leading biotech company. This technology essentially replaces a standard stirred-tank batch reactor and offers a major cost reduction - in both capital and operating costs, as well as better product quality, lower carbon footprint and waste reduction.

The technology is applicable to a wide range of applications, such as crystallisation, biodiesel, hydrogenation, polymerisation and pharmaceutical API's.

The mixing in the NiTech Continuously Oscillatory Baffled Reactor (COBR) is much more efficient than the mixing in a standard CSTR. The mixing, combined with high surface area per unit volume, means that steam and cooling water usage is much reduced. Furthermore conditions very near to plug flow can be attained at relatively low flow rates resulting in consistent product quality and yield.

Very much one of the 'green technologies' we hear so much about!

BP Sets Up New Safety and Risk Unit

photo : Wikipedia

The incoming BP Chief Executive Bob Dudley has announced that the company will set up a new Safety and Operational Risk function.

This change, implemented as a result of the Deepwater Horizon incident, creates a division reporting directly to Dudley and with responsibility "for ensuring that all operations are carried out to common standards, and for auditing compliance with those standards".

Dudley has also announced that BP will also review how it rewards its managers, with the stated aim of encoraging excellence in safety and risk management.

The blog applauds these actions, this is an appropriate response to such a catastrophic incident, putting process safety and risk management to the top of the corporate agenda. The only question is, why was this action not taken after Texas City?

Shell to Close Ethylene Capacity at Wesseling

photo : eagleburgmann.com

Shell has announced that it will close the 2B Rheinland cracker in Wesseling, Germany, by the end of 2011 and cease benzene and toluene production from the unit before the end of 2012.

So far, European ethylene production has been left relatively intact, given the difficulties associated with its import.

However with Ineos having recently signalled that it may build a 1m tonne ethylene terminal at Antwerp, which would give a significant extra input to the ARG network, together with the large increase in global capacity coming from start-ups in the Middle East and Asia, this situation is surely under threat.

Shell's announcement is not a major surprise, with the Wesseling cracker being relatively small and uncompetitive. It would not be a surprise if more such announcements were to follow in the not-too-distant future.

Typhoon Leads to Petrochemicals Shutdowns in Taiwan

photo : http://www.cdn.wn.com/

Chemicals manufacturers are very familiar with the need for comprehensive risk assessments and the implementation of appropriate mitigation measures. However, some events are beyond the wildest imagination of most manufacturers.

Producers in Taiwan have been forced to shutdown petrochemical facilities in Kaohsiung in southern Taiwan because of flooding caused by Typhoon Fanapi.

A report in John Richardson's 'Asian Chemical Connections Blog', published by ICIS, indicates that the flood waters reached a height of more than 100 centimetres in the petrochemical parks.

No doubt the plants will restart swiftly once the waters have receded but one can imagine significant damage to equipment (IP65 is a standard for most instrumentation but only gives protection against water spray and not total immersion) as well as the awful mess that will have to be cleared before things can return to normal.

Shale Gas Prospecting Moves to UK

photo : Shaun Dunmall (Flickr)

The race for shale gas continues to gather pace, with  reports of UK being one of the newest sites for exploration.

For the British, Blackpool is a traditional seaside town, with its iconic tower, donkey rides and amusement arcades on the famous 'Golden Mile'.

That reputation may be set to change however, if the company Cuadrilla Resources is able extract gas from the nearby Bowland shale. Cuadrilla is a new name in the industry but apparently is significantly backed by private equity.

There are some concerns about the extraction of shale gas. The US Environmental Protection Agency is currently investigating the potential problems associated with hydraulic fracturing and in particular the need for high volumes of water, together with the risk of contamination by the chemicals used in the fracking process.

For the UK, with a dwindling supply of gas coming from the North Sea and an increasing reliance on imports from countries such as Russia, the possible availability of shale gas is is potentially very good news. Apparently suitable geological conditions exist in much of the North West of England, North Wales and in the area around Oxford. If Cuadrilla achieve success, we may very well see many more companies joining the hunt.
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Update - thanks to the reader for the following comment on shale gas prospects in the UK

"Boring Rock" - Prospects for Shale Gas in Britain provides the comments of Mike Stephenson of the British Geological Survey. The article can be read at http://www.naturalgasforeurope.com/

ICIS Publishes Top 100 Companies For 2009

ICIS has recently published its regular Top 100 Chemical Companies feature, together with an excellent analysis of the events of the last year.

The Top 5, ranked in terms of sales, are BASF, Dow Chemical, ExxonMobil, Sinopec and Lyondell Basell. Of these, Sinopec is new to the top 5, having been ranked 8th last year.

Looking back over the last year, it is really quite remarkable that the major chemical companies have fared so well in adapting to an economic crisis that saw an oil price crash from a peak of $147 per barrel down to $32 per barrel and a virtual collapse in markets such as construction and automotive.

Clearly survival required significant cost reduction across the board. Reduced working capital, operating and maintenance cost reductions and reduced capital expenditure were commonplace, the only difference being the depth of cuts from one company to the next.

This blog has talked much about a new normal in the post recession period. The challenge remains a difficult one for all chemicals producers as we move forward. It will be necessary to deal with the economic conditions that this new normal will bring, whilst also adopting strategies to address the impacts of the recent cost cuts in areas such as capital expenditure.

However, in having survived so far, companies have clearly demonstrated that they have the management capabilities and willingness to adapt.

Avoiding Software Downtime to Maximise OEE

I'm always happy to post relevant articles from readers of the blog. This piece by Tracy Barlow of 24/7 Uptime discusses how to maximise OEE by protecting critical software from downtime or loss.

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Having recently read the Software Advice article “A Plain English Guide To Modern Manufacturing Methods” on International echem’s blog, there is something else to consider when looking to improve overall equipment efficiencies (OEE).

We all know that even a minute of downtime can mean lost productivity, lost profits, increased waste, compromised safety and damaged reputation. But whilst process automation solutions do much to accelerate, optimise and protect manufacturing processes, the software itself has to be protected from downtime or loss.

We researched the offerings available in this area and decided to work with a solution called everRun software from Marathon Technologies. everRun is a cost effective solution implemented on standard hardware/servers that keeps critical systems up and running upto 99.999% levels of availability.

Different systems do need different levels of protection because some are more business critical than others. However, continuous availability is becoming increasingly important to organisations. The application availability pyramid below shows the average yearly downtime suffered with different availability levels:

This technology protects environments by combining the components of two or more physical servers to ‘share’ components: hence faults such as disk array failure and/or loss of network card, etc, can be tolerated with zero impact on the processing environment. Even a full server failure is tolerated with zero downtime.

And this is how it does it:

Marathon everRun High Availability Diagram

I recently heard a very good summary description about this technology “From financial transaction systems at the New York Stock Exchange to pharmaceutical manufacturing companies, more than 3,500 customers worldwide use Marathon everRun to robustly protect their essential systems – and that’s a very high level of trust.”

Turbulent Times Continue for Chemicals Manufacturers

Having already withstood one of the worst recessions in living memory, chemicals manufacturers were very much hoping for some respite, as the world economies appeared to be pulling out of recession.

The summer break, however, has brought more suggestions of double-dip recession and with car sales and construction starts down, together with a likely slowdown in economic activity in China, we can foresee a difficult few months for the chemical industry. The 'new normal' as predicted by my colleague Paul Hodges, is very much with us.

So how do we cope with this 'new normal'. We've already had job cuts and, in many instances, significantly reduced levels of discretionary expenditure. So where next? It certainly isn't an easy question to answer and there isn't a one size-fits-all solution but I think that a very high level of challenge and focus is most important, in order to ensure that we are fully focussed on doing the right things

Here's a list of questions to challenge the management team of any chemicals manufacturer...

• Do you have a highly capable manufacturing management team?
• Does your team understand the challenges of the new normal?
• Does the team understand the need for adaptability and flexibility?
• Does the team know how to achieve this adaptability and flexibility?
• Are management objectives aligned with these needs?
• Have strategies been prepared for the challenges which may occur?
• Are all of the operating and capital cost requirements fully understood?
• Is there a relentless drive to improve cost effectiveness?
• Does the management team understand fully the consequences of any decisions they make?
• Do you know what your competition is doing to achieve success in the new ‘normal’?
• Does your workforce have the right skill levels for the high level performance required under varying conditions?
• Does your workforce understand the need for change?
• Do you have appropriate agreements in place to give you the required levels of flexibility?
• Are your workforce objectives and targets aligned with those of management and the organisation?

Holidays

To all readers of the blog.

I will be on vacation until the end of August. Blogging will restart in September.

A Plain English Guide to Modern Manufacturing Methods

Thanks to Stephen Jannise of ERP Software Advice (see photo) for pointing out this excellent guide to Modern Manufacturing methods.

Although many such methods were pioneered in the automotive sector, the principles are very much applicable to the chemical industry. Indeed many chemical companies have achieved great success in the application of techniques such as Lean Manufacturing and Six Sigma.

In the post recession environment, companies will achieve success by being smart. This means innovation - such as investment in new technologies, development of new processes and optimisation of existing processes. Modern manufacturing techniques will facilitate much of the optimisation work.

The guide gives an excellent introduction for those who wish to familiarise themselves with the subject!

Iran Petrochemical Plant Explosion Kills Four

photo : http://www.tradearabia.com/

According to reports, 4 workers were killed as a result of an explosion at the NPC plant in the Gulf island of Kharg. The explosion occuured on Saturday evening.

According to the provincial governor 'An explosion from a gas leak occurred on Saturday evening around 7pm, but it was extinguished at 12am by firefighters'.

Despite the impact of sanctions, Iran has a good record on safety. A quick look at the programme for the 2011 International Conference on HSE, shows the high level of focus on safety issues, including a number of process safety topics. As a state-run organisation, NPC has invested heavily in new plants but has maintained a good safety record. It is hoped that the investigation rapidly identifies and addresses the root cause of this particular incident.

Ineos Bio Waste to Ethanol Projects Gather Momentum

photo : http://www.m13.ca/

The Ineos Bio waste to ethanol process is attracting a great deal of attention currently.

Back in December, this blog reported that Ineos Bio, together with its partner New Planet Energy, had been selected for a $50M grant for its advanced bioenergy facility in Florida, USA. The facility to use INEOS Bio’s advanced BioEnergy technology to produce bioethanol and power from a range of feedstocks, including forestry waste, agricultural waste, sustainable energy crops, construction waste and municipal solid waste.

More recently, in June this year, it was announced that INEOS Bio had received an offer of a £7.3m grant towards £52m construction costs for the first commercial plant in Europe using its advanced BioEnergy Process Technology. According to Ineos Bio, 'The plant, to be located at the INEOS Seal Sands site in the Tees Valley, is designed to produce 24,000 tonnes per year (30 million litres) of carbon-neutral road transport fuel and generate more than 3MW of clean electricity for export from over 100,000 tonnes per year of biodegradable household and commercial waste. This would provide the biofuel requirement of around 250,000 vehicles per year running on E10* and the electricity needs of 6000 households.'

The process takes domestic waste, converts it into gases and then uses an anaerobic fermentation step to convert the gases into bio-ethanol. My understanding is that the process is highly efficient and has relatively low costs, meaning that this type of facility could be installed in any large population centre and provide an effective means of energy production, whilst eliminating costly landfill or waste incineration.

The Florida facility is due on-line in 2011. If this project proves to be successful, which I fully expect to be the case, one can foresee many other such projects being implemented around the world.

ACC Calls For End of Moratorium on Deepwater Drilling

photo : www.offshore-technology.com

The American Chemistry Council (ACC) has called for a solution to be found to end the drilling moratorium in the Gulf of Mexico.

The ACC President and CEO, Cal Dooley, made these remarks in The Hill's Congress Blog. Dooley noted the potential harm to US Manufacturing, including chemicals manufacturing, of policies that will reduce the availability and increase the price of energy in the future.

Whilst the moratorium is understandable, as a reaction to events in the Gulf of Mexico, the issue needs to be considered in its wider context. Whilst this blog has long argued for a policy of sustainability and energy efficiency, the world is still highly dependent on fossil fuels and we are very far away from having an energy future based entirely on renewables.

Peak Oil is a major subject by itself, but all experts agree that we are well past the peak of oil discovery and that we are approaching, in the short-to-medium term, the peak of oil production. This means that oil and gas production from unconventional sources, such as shale gas, is increasingly important and we must also continue to find and safely and efficiently produce oil and gas from all conventional sources.

This does not mean that we should take unnecessary risks in doing so but instead should find engineered solutions to our issues and operate under a regime of thorough oversight and regulation. The Gulf of Mexico incident was a tragedy and steps must be taken to prevent this from happening in the future but we cannot afford to call a halt to deepwater production at this time.

Reliance Industries Joins Shale Gas Rush

photo : energy.alberta.ca

A regular theme on this blog has been the development of the shale gas industry. Now Indian major, Reliance Industries, has joined the party, investing a total of $1.36billion to acquire and develop a share in Texan shale gas assets.


Reliance has paid Pioneer Natural Resources some $236M for a 45% stake in the Eagle Ford shale assets in southern Texas for $236M and will further invest $1.052B to develop the fields over the next four years.

Back in April, Reliance invested $1.7B to create a venture with Atlas Energy, a deal which gave Reliance a 40% in the Marcellus shale fields in the USA.

This move again shows the growing importance of unconventional oil and gas to the IOCs and the petrochemical majors such as Reliance. With discoveries of conventional oil and gas reserves having peaked some time ago and with control firmly in the hands of the National Oil Companies, we can expect more and more activity in the development of unconventional resources. This will also increasingly shape the future of petrochemicals, now that the peak of investment in crackers based on conventional sources of feedstock appears to have passed.

CSB to Investigate Deepwater Horizon Incident

photo :Oilonline.com

I'm very pleased to hear that the US Chemical Safety Board (CSB) has been invited to investigate the causes of the explosion on the Transocean/BP oil rig, which occurred on 20th April.

The CSB takes a very holistic approach to its investigations, looking at technical factors but very importantly, the organisational, cultural and human factors which may have contributed to such an incident.

An additional benefit of a CSB investigation is the fact that CSB is capable of producing excellent material to share all of the learnings with the wider community. The video  'anatomy of a disaster' about Texas City is a must see for chemical industry professionals.

In a letter to Senator Henry Waxman, the CSB Chairman, John Bresland, has agreed that the investigation will look for similarities with the BP Texas City explosion but stressed the importance that the investigation be carried out without preconceptions and that all of the underlying causes and factors are thoroughly examined.

This point is essential. Politicians and some media outlets have been very quick to condemn BP as 'guilty'. Some of the accusations may prove to be valid but this can only be fairly determined with a thorough and proper investigation of all of the issues and all of the parties involved.

UK Emissions Data Shows Impact of Recession

 photo : DECC

The UK Department of Energy and Climate Change has released provisional 2009 figures for UK greenhouse gas emissions.

At a first glance, the figures appear to tell a positive story, with the UK set to meet its pledge to cut CO2 emissions by 20% from 1990 levels in 2010. However on closer inspection, it can be seen that emissions have been more or less steady since 1995 and the big drop occurred in 2009 as a result of the global recession and a significant drop in manufacturing output. It is likely, therefore, that similar reductions have occurred throughout Europe and North America.

From a social and economic perspective, a reduction in output is counterproductive. If manufacturing capacity is lost in Europe and North America, it is unlikely to be replaced at the same location.

It is absolutely right to focus on reducing emissions but innovation and good engineering practice is the way to achieve this. The 2009 figures create a positive illusion but the reality is that we have a long way to go to achieve sustainable emissions reductions.

Bhopal Arrests - Too Little and Too Late

photo : ibtimes.com

Much  press coverage this week about the sentences given to former Union Carbide empoyees in relation to the Bhopal disaster which occurred on 3rd December 1984, when the plant released 42 tonnes of toxic methyl isocyanate (MIC) gas, exposing more than 500,000 people to toxic gases.

Rightly, in this blog's view, the Indian Press and much of the world's press have expressed their disgust at the lenient sentences and the fact that nothing was done to bring the US based former Union Carbide head, Warren Anderson, to justice.

Bhopal was an incident that was simply waiting to happen. There were very many 'obvious' issues which could and should have been addressed by a company with the experience, expertise and capability of Union Carbide

• Capital expenditure had been minimised  
• General cost cutting had led to poor working conditions and an inadequate inspection regime
• Safety rules were inadequate and operators were instructed to ignore them
• Training was cut back drastically to cut costs
• Workers were forced to use manuals in English, even though very few could understand the language
• Some safety features had been dismantled or disabled
• Safety systems were inadequately designed
• Supervision was reduced to save cost
• Poor morale led to an exodus of skilled personnel to better and safer jobs

Chemical manufacturers have a duty-of-care to employees and the general public. Chemical industry professionals receive years of training in order to fulfill this duty. For managers with the right training and experience, issues such as those listed above are easy to identify and address. Managers, at all levels and in any chemical manufacturing company, should be capable of spotting and addressing such major issues. If this isn't they case, they should not be in the role.

Shale Gas Discovered in Poland

photo : Energy Tribune

According to Polskie Radio's website,  PKN Orlen, the Polish refining and petrochemicals group, has discovered large quantities of shale gas in the Lublin area in the East of Poland.

The find is significant, as experts have estimated that Poland may have up to 3 trillion m3 of shale gas. Currently, Poland is reliant on Russian imports for much of its gas.

The news will also be a major boost for Poland's chemical industries, with fertiliser producers and petrochemicals manufacturers potentially set to benefit from this new gas source.

This blog has watched the development of the shale gas business with interest. There have already been significant developments in North America. It has been suggested for some time that Europe could be a rich source of shale gas. Discoveries such as that in Poland, show that the future of energy and chemical feedstock supply in Europe could be set to take a new course.

New Economic Fears Highlight Need for Manufacturing Excellence

Back in September 2009, this blog highlighted the 'new reality' faced by chemicals manufacurers.

As stated at the time "If our view is correct, we are in for a sustained period of lower volumes and reduced margins but punctuated by periods of high volatility caused by oil and currency markets. This will certainly mean that the pressure that has been experienced by the manufacturing sites during the downturn will continue."

With the current EU financial difficulties and the tightening fiscal controls in China, it appears that this statement was spot on. Although things have been generally better for manufacturers over the last 6-9 months,we are heading into very turbulent times once again, particularly in Europe and in Asia.

As I mentioned back in September, chemical manufactureres need to once again think very hard about the actions they need to take in order to survive the coming storm and to come out in good shape at the other end.

• There must be a clear focus on what has to be done to survive but this absolutely must not affect the ability to be flexible .
• A focus on cost effectiveness and value for money is essential.
• Wastes of all types must be identified and systematically eliminated using approaches such as Lean Manufacturing.
• Organisational effectiveness is a must. Staffing levels must be reviewed critically to ensure that organisations are as effective as possible and staff should be trained and ready to play their part by being able to safely and effectively start-up, shut-down, change grade and increase production rates at very short notice.
• Simply cutting numbers is not smart enough - skills must be retained but have sufficient flexibility to be available and ready, as and when required

Deepwater Horizon Incident Leads to Regulatory Reforms

photo : Upstream Today

As efforts continue to stop the flow of oil and manage the environmental impacts of the Deepwater Horizon disaster, the US Government has indicated that it will implement a series of regulatory reforms to minimise the risk of such an incident happening again.

Secretary of the Interior, Ken Salazar, has announced a series of reforms that will provide federal inspectors more tools, more resources, more independence, and greater authority to enforce laws and regulations that apply to oil and gas companies operating in US offshore areas.

Meanwhile, the question of blame is making the headlines. It was reported this week that US oil industry regulator the Minerals Management Service did not enforce the installation of a secondary shutdown system to give back up in the case of failure of the blow out valve. It is also reported that the various parties involved in the incident are already pointing the finger at each other in apportioning blame.

The immediate issues must be resolved by all parties working together to stop the leak and to address the environmental situation in the most effective manner possible. Detailed investigations and apportionment of blame will undoubtedly follow.

A technically sound and proven back up safety system has to be designed and implemented on similar offshore patforms. This is, in my view, essential in order to avoid a major loss of public and government support for the offshore oil and gas industry. With a significant proportion of the world's offshore reserves being located offshore, failure to do something different is not an option.

Shell Singapore Fully On-Line

photo : Hydrocarbons processing

Shell has announced that its integrated refinery and petrochemicals complex in Singapore is now fully on line.

Shell has long talked of highly efficient, integrated supersites being the company's blueprint for the future. The Singapore Site certainly ticks all the boxes with the following features

• Complex refinery with capability to process a wide range of crudes
• Flexible cracker using latest technology and with capability to process heavier raw materials from refinery
• World scale downstream plants with latest technologies
• Fully integrated site infrastructure
• Optimisation models to maximise margins depending on feedstock prices and availability

The site can process 500,000 bbl/day of crude and the cracker has a capacity of 800kT. All of the downstream plants are of large capacity.

According to the press release, the investment is Shell's largest ever in chemicals. As the blog noted back in November, at International eChem, we have long argued that the critical success factors for petrochemical operations are integration, size, technology, global reach and location. The SEPC complex scores top marks on all of these points.

Australia Invests in Carbon Capture and Use

photo : bp.blogspot.com

Sticking my my previous themes of Australia and environmental issues, I was interested to read that the Australian government has committed $40M to a project to capture CO2 and transform it into building materials.

The project is being run by the Calera Corporation, a company which specialises in this technology. Construction work is due to start construction this year and the facility will use carbon dioxide captured from TRUenergy's Yallourn power station.

Following the initial demonstration phase, Calera plans to capture more than 300,000 tonnes of carbon dioxide and convert it into more than 1 million tonnes of building material a year.

Calera believes that the solution is more financially attractive than any alternative carbon capture solution.

If the economics are sound, this has to be an excellent solution, with less uncertainty than carbon capture and storage. The world will undoubtedly continue to need high quanities of cement and if CO2 can be used a feedstock, rather than being released to the atmosphere as a perceived threat to climate, then this has to be a win-win solution to satisfy all parties.

Austraila Delays Emissions Trading Scheme

Australia has postponed the implementation of its proposed emissions trading scheme until 2012 at the earliest, according to news reports.

In justifying the postponment, Prime Minister Kevin Rudd said that by 2012, when the current Kyoto deal expires, governments around the world would need to make clear their new carbon reduction commitments.

Kevin Rudd has been under significant pressure from within Australia and in particular from Tony Abbott, the leader of the opposition Liberal Party.

Australia's move follows on from the uncertainties over the Cap and Trade bill in the US, which has slipped down the political agenda in recent months. These moves leave Europe increasingly isolated on the issue and has led to some member states questioning the wisdom of unilateral action on climate change. Other member states have suggested the imposition of carbon taxes at Europe's borders, to protect the competitiveness of Europe's industries.

This blog continues to argue that all manufacturing industries need a strong sustainability agenda, with increased use of renewables and a strong focus on new technologies to reduce energy consumption and waste. Government support should be for the development and implementation of such technologies, rather than trying to implement regional schemes which will do little to drive a global improvement in energy efficiency but which will lead to relocation of manufacturing plants and jobs.

As for carbon taxes, they are highly complex to implement, given the range of products to which they will need to be applied. They are virtually impossible to link back to energy efficiency and will be ultimately passed on to the consumer, thereby driving inflation.

Levels of Investment in Manufacturing Software Improving

There are many ways in which we can assess the health of the chemical industry. Thanks to Houston Neal of Manufacturing ERP Software Advice, for providing another perspective on the health of the chemical industry.

The 2010 Manufacturing Software State of the Industry Roundtable has focused on the state of manufacturing ERP Software.

The report shows that 2010 is healthier than 2009. Purchase activty is up, with the increase in activity attributed to two primary reasons - firstly that we have reached the 10-year anniversary of purchases made as a result of the Year 2000 (Y2K) date problem secondly and most importantly, many companies are restarting buying processes that were deferred in 2009. The report also notes that the chemical sector is one of the most active in terms of new purchases.

This last point is highly encouraging. I've seen many companies in the chemicals sector deferring spend in many areas as a result of the recession. Clearly for items such as control systems and manufacturing software, such expenditure can only be deferred for so long but to see a clear shift at this point in time is very welcome news.

UK Health and Safety Executive Publishes Buncefield Evidence

photo : Hertfordshire Constabulary

The UK Health and Safety Executive (HSE) has published some of the evidence being presented in the current trial of three companies over the explosion at the Buncefield depot in 2005.

As a reminder, several explosions occurred at the Buncefield Depot in the early hours of Sunday 11th December 2005. At least one of the initial explosions was of massive proportions and there was a large fire, which engulfed a high proportion of the site. Over 40 people were injured but thankfully there were no fatalities.

There was, however, substantial damage to  properties in the area and the fire burned for several days, destroying most of the site and emitting large clouds of black smoke into the atmosphere.

A number of videos and photos have been published. The videos are stunning, showing the speed at which the vapour cloud advanced. The photos show the damage to the control room and the spread of debris following the explosions.

I'd recommend all those with an involvement in chemical manufacturing to take a look and challenge your own operations.This type of incident is totally preventable if we take the time and effort to assess the risks and then take the right actions to systematically eliminate them.

Deepwater Horizon - Update

According to latest reports, concerns are growing for the 11 workers still missing following the explosion on the rig on Tuesday evening, which caused the rig to collapse and sink yesterday.

A team of engineers is also working to control a major oil spill, caused by very subtantial amounts of oil and gas pumping out from the oil reservoir

According to Transocean, the Swiss company that owned the rig, engineers are trying to cut off the uncontrolled flow of oil using a subsea robot. Apparently the the robot, equipped with cameras and remote-controlled arms, is being used to try to activate an automatic shut off device on the seafloor, designed automatically to clamp shut over the base of a pipe that connects the rig with the seabed.

First priority is to locate the missing persons and deal with the spillage. The investigation, when it takes place, will certainly have to look at the design of similar shut-off devices to ensure that in future, activation occurs even in extreme circumstances such as this.

Transocean Oil Rig Explosion - Echoes of Piper Alpha?

photo : Upstream Today

An explosion on Transocean's 'Deepwater Horizon' oil rig at approximately 10 pm on Tuesday has left 11 people  missing and 17 in hospital, of which 4 are critically ill.

Ther rig is owned and operated by the Swiss company Transocean and was carrying out exploratory drilling on behalf of BP.

At presnet, authorities are unable to say when the flames might die out on the rig. A large column of black smoke was seen over the Gulf of Mexico as firefighters tackled the blaze.


Adrian Rose, vice president of Transocean, said the explosion appeared to be a blowout, in which natural gas or oil forces its way up a well pipe and smashes the equipment. But precisely what went wrong is still under investigation.

According to reports, a total of 126 workers were aboard. 79 were Transocean workers, 6 were BP employees and 41 were contractors.

Still far too early to draw any conclusions but the fact that so many are missing and that many more are injured means that a full and thorough investigation must be carried out as quickly as is possible.

Icelandic Volcano - Are the Authorities Being Overcautious Regarding Air Travel?

photo : Virtualtourist.com

Over the last couple of days, I've heard from many friends and colleagues stuck in various desitnations, either on business or vacation.

We've all read about the issues for travellers and for the airlines. There are also a great many other businesses, mine included, which are totally dependent on overseas travel.

So clearly, the human and economic costs are very high. Against this backdrop, I keep asking myself two questions - Firstly, Are the authorities being too cautious in deciding to ground air traffic? Secondly, would I be willing to fly in European Airspace right now?

The Financial Times has a very interesting article, with some major questions regarding the validity of the computer models used in Europe and the comparisons between the European and US approach to aviation safety.

In the chemical industry, we tend to start with the precautionary principle but then use a combination of theory and data to give a quantified analysis of the risk. Risk can never be eliminated but we can make decisions on whether or not it is acceptable.

If the models are flawed, we need to systematically collect data, such as that generated from the various test flights over the last few days and any other data which we deem necessary. We should then use this to validate or challenge the models (whilst checking whether the jet engines have suffered any damage).

What we can't afford to do is sit around, rely solely on the existing models and hope the problem will go away, particularly when there are other potentially active volcanoes in the same area.

As for whether I would be willing to fly - well I wouldn't want to fly around the volcano but would be willing to accept the assurances given to me by the airline companies and fly if they believe that it is safe to do so.

UK Chemicals Exodus Underway?

I've just spotted a very interesting article from the Royal Society of Chemistry outlining concerns over the potential exodus of chemical and pharmaceutical companies from the UK.

As many will know, Ineos has recently announced its decision to relocate its corporate headquarters from the UK to Switzerland.

A number of other chemical and pharmaceutical companies may be poised to follow suit, given concerns over the perceived high levels of taxation in the UK for businesses and individuals.

Already the vast majority of UK chemical plants are owned by companies with headquarters outside of the UK. If the UK is no longer considered to be a 'strategic' location for an organisation, there may well be a drift of corporate, commercial and technical positions from the UK. Ultimately plant closures could follow, particularly if the total cost of employment is deemed to be too high.

This is a major concern. We have seen significant numbers of closures in recent years. My sense is that the UK needs a strong chemical sector, particularly if we wish to have a leading role in the development of green technologies. Although relocations of corporate HQs do not change the asset base, they do affect sentiment and can impact future investment decisions.

Lotte Chemical UK - Update 2

photo : Middlesbrough Evening Gazette

The Lotte Chemical UK PTA plant has now successfully restarted, following the recent acquisition from Artenius UK.

The plant had been mothballed for 13 months following the closure by Artenius but was restarted successfully and ahead of schedule by its new owners.

This is quite remarkable, given that the new production team was only recruited during March of this year. Fortunately, the Teesside area of North East England has excellent process industry skills, so finding people with the right skills and experience was reportedly much easier than it might have been.

Even so, a plant restart after such a period is a complex activity. To successfully achieve it ahead of time  is a remarkable achievement. Many congratulations to all involved!

LyondellBasell Agrees US Environmental Settlement

photo : soils.co.uk


The Chemical Engineer has reported that LyondellBasell has agreed a settlement with the US Government for clean up of contaminated US sites. Under the settlement, LyondellBasell will pay $170m to clean up 15 contaminated sites across the US.

The contamination relates to sites which were never operated by Lyondell or Basell but which had been acquired in historical transactions.

This blog has no knowledge of the transactions involved and does not know what was or was not done in terms of detailed technical due diligence and/or protection against historical environmental liabilities by Lyondell, Basell or any of its predecessors.

The settlement does remind us, however, that costs associated with environmental clean-up can be very high. As chemical industry M&A activity starts to increase, potential buyers should be mindful of the need to carry out comprehensive technical and environmental due diligence, to ensure that all potential value adjusting issues are identified and managed accordingly during any deal

Better News For Manufacturing Sector

Back in November, I reported on the optimism expressed by purchasing managers in the Institute of Supply Management (ISM) October report.

The latest report, for March 2010, shows that the US manufacturing sector expanded for an 8th consecutive month, showing that the optimism was justified.

As noted previously, The Institute uses its Purchasing Managers' Index (PMI) as an indicator of performance. A PMI score of below 50 indicates that the sector is contracting, whilst a score above 50 indicates that the sector is expanding. The data for the index is collected using a survey of 400 purchasing managers in the manufacturing sector on five elements; production level, new orders from customers, speed of supplier deliveries, inventories and employment level. Studies have shown that the PMI gives reasonably good correlation with the state of the economy and GDP growth.

The index has rebounded from a low point of 32.9% in December 2008 and now stands at a figure of 59.6%, a very positive score, reflecting the growing optimism throughout US manufacturing.

For chemicals, the news is mixed. Automobile sales have improved significantly and with each new car containing almost $3000 worth of chemicals, this is very welcome news. Meanwhile, another major consumer of chemicals, the construction sector, remains relatively flat.

More positive signs. Still a long way to go to reach 2008 levels but a major improvement on 2009.

Pressure Mounts on European Petchems

As the wave of new capacity comes on line, pressure is mounting on petrochemicals producers in Europe.

Just taking ethylene capacity as an indicator, almost 7 million tonnes new capacity started up in 2009, another 7 million tonnes is due to come on-stream in 2010 and a further 5.5 million tonnes in 2011. Almost all of this new capacity is in the Middle East and Asia.

With the construction sector is still relatively weak and the automotive sector potentially at a turning point, given the withdrawal of economic stimulus initiatives, producers have increasingly relied on growth in Asian markets to fill the demand gap.

However there is little doubt that steadily increasing volumes of ethylene and derivatives will be arriving in Europe, increasing the pressure on producers. All have been through major cost cutting programmes over the last couple of years and have little room for further manoeuvre in this regard.

As a consequence, further capacity reduction is almost inevitable. However against a difficult political backdrop, as demostrated by recent strikes in France related to refinery closures, it is very difficult to predict just where this will happen.

5 Years On Since Texas City - CSB Statement

photo : CSB

March 23rd marked exactly 5 years since the Texas City disaster, a tragedy that resulted in 15 deaths, 170 injuries and a huge financial cost for the owner, BP.

A lot has happened in that time; there has been much wider recognition of the need for effective Process Safety Management (PSM) and many companies have implemented or are in the process of implementing very strong PSM policies and procedures.

However, there are still many companies that are not doing as much as they should in this regard. This is clearly a major concern. As a regular reader of the trade press, I see details of incidents and fatalities on a depressingly regular basis. This really should not be the case.

The Chairman of the US Chemical Safety Board (CSB), John Bresland has issued a statement regarding the incident and its impact on the industry. His final paragraph is a very succinct reminder for all of us in the industry

"When will we know whether the tragedy of 2005 has resulted in greater safety at BP and other companies’ refineries? Only when we can look back over the passing of a significant number of years without major accidents, deaths, or injuries. In the meantime, only the highest commitment to running down the even smallest of problems and upsets will assure the prevention of so-called low probability, high-consequence events like the tragedy that took so many lives in Texas City five years ago today."

Lotte Chemical UK - Update

According to press reports, the Wilton PTA plant will now restart on 15th April. The blog wishes very good luck to Lotte Chemical and its staff at Wilton.

Illinois Resolution Ask Congress to Postpone EPA Regulations on Emissions

photo : theage.com.au

Back in December, this blog discussed the recent proposed changes to emissions regulations announced by the US Environmental Protection Agency (EPA). The EPA, in announcing the“endangerment finding", classisfied CO2 and other greenhouse gases as "atmospheric pollutants", allowing it to regulate such emissions under the existing authority granted by the Clean Air Act.

The move has enraged US industry, who believe that the ruling puts at risk US jobs and the US economy.

This week, the Illinois House of Representatives passed a resolution encouraging “the Congress of the United States to adopt legislation that would postpone the US EPA’s effort to regulate greenhouse gas emissions from stationary sources using existing Clean Air Act authority until Congress adopts a balanced approach to address climate and energy supply issues without crippling the economy.”

In a related statement, the President of the American Chemistry Council, Cal Dooley, made the following comment on the issue "Congress and the Administration must act immediately to postpone EPA stationary source regulation that could have far-reaching consequences for economic recovery, job creation and energy efficiency".

Pressure is steadily mounting on the EPA, who, thus far, as resisting pressure to make changes to the proposal.

This blog's view is that issues as important as this are vital to the industry. A balanced and global approach is required to addressing climate concerns. Localised initiatives cause localised damage to industry and employment, they ultimately lead to carbon leakage and do not end up benefitting anyone.

UK PTA Plant Set to Restart

photo : El Economista

Following numerous posts about site closure, I'm delighted to post an article about a plant restart. Back in July last year, this blog reported the closure of the La Seda PTA/PTA plant at Wilton, UK.

The company Lotte Chemical UK Ltd., a part of the wider Lotte Group recently bought the Wilton Plant for 26 Billion Korean Won (US$22.4 mln). The Wilton plant has capacity to produce 500,000 tpa of purified terephthalic acid and 150,000 tpa of polyethylene terephthalate.

The Lotte Group's goal is "to be come a group that is appreciated by even one more person and to produce products that are loved by as many people as possible" - I'm sure that the company is appreciated by quite a few people on Teesside just now!

Shale Gas Again in the News

photo : Energy Tribune

The subject of shale gas has been very much in the news in recent days.

According to reports, Shell and PetroChina have offered $2.96BN for Australian unconventional gas producer Arrow Energy.

This deal would help meet China's energy needs and would provide additional feedstock for Shell’s proposed 16m t/y LNG production plant at Gladstone port in Queensland.

In the USA, the subject of Shale gas has dominated the CERA Week 2010 Energy Conference in Houston. Keynote speakers from both BP and Chevron have stressed the importance of shale gas to US energy supply, whilst the Energy Secretary, Stephen Chu, asserted his view that natural gas should be seen as a transition fuel, helping the world to achieve a shift towards green forms of energy.

This blog's view is that energy supply and energy security will rise up the agenda in the not too distant future. Many countries (such as the UK) potentially face significant energy shortfalls related to proposed closures of existing generating capacity. A move towards green and sustainable forms of energy will help the energy mix but gas will play an essential part in a secure energy future, both in the transition and in the longer term. The fact that so much activity is taking place in relation to shale gas shows that much of industry shares this view.

Chemical Release at UK Plant Injures Four

photo : http://www.hull.ac.uk/

FOUR workers were hurt last week, one very seriously, following a serious leak of titanium tetrachloride (TiCl4) from the Cristal Global titanium dioxide plant near Grimsby, UK.

The workers suffered burns and toxic inhalation injuries when up to two tonnes of titanium tetrachloride were released at the site, following the rupture of a pressurised container. The company has indicated that the site will remain closed until it was satisfied it was safe to restart operations.
 
The causes of the incident are not yet known and the investigation is on-going. Staff from the UK Health and Safety Executive have been present at the site over the weekend.
According to reports, the company has previously been prosecuted for releasing titanium tetrachloride to the atmosphere in 2006.
 
The site was severely impacted by the recession during 2009, with a number of production slowdowns and a extended shutdown due to the drop in demand for construction related products.
 
This incident was very serious and could have resulted in multiple fatalities. Thankfully this wasn't the case but is still vital that all of the root causes are fully understood and issues rectified before the facility restarts.

Blogging to Resume Shortly

Blogging has been limited lately due to an extensive travel schedule. Blogging will restart in a week or so

Fatigue Raised as Possible Factor in Kleen Energy Systems Explosion

photo : Dayton Daily News

A fire and explosion killed five people and injured several more on Sunday  at a gas-fired power plant under construction at Middletown, Connecticut.

According to initial reports, the blast occurred during testing at  facility, according to a statement by the mayor's office late on Sunday.

A natural gas leak caused the blast during the testing of the plant, which was 95% complete and was due to come on stream later this year, according to reports.

New reports are suggesting that fatigue may have been a major factor, with some workers reportedly working 12-hour shifts, 7-days per week for an extended period.

There is much guidance available on the risks associated with fatigue. The UK Health and Safety Executive publishes an excellent guide to fatigue and its risks. Although it is too early to say whether fatigue was truly a factor in this instance, it is known to have been a factor in other major instances, such as BP Texas City, and steps should always be taken to avoid chronic fatigue and the associated risks.

Downstream Changes at Shell

photo : icnetwork.co.uk

Following  relatively weak 4th quarter 2009 results, Shell has commented on the need for further downstream changes in order to improve company performance


Commenting on the results, Shell CEO Peter Voser noted that Shell's fourth quarter was impacted by the weak global economy. He noted that oil prices had increased compared to a year ago but gas prices and refining margins had declined sharply, because of weaker demand and high industry inventory levels.

Shell's assumption is that there won't be a quick recovery, and the outlook for 2010 will remain uncertain. As a consequence, it has sold a number of downstream assets and closed a refinery in Montreal, Canada. A number of other cost cutting initiatives are either underway or being actively considered, including further downstream divestments and a major downstream cost reduction programme.

The assumption that the recovery will not be rapid means that Shell is taking decisive action to position itself for the coming years. The assumption is equally valid for chemicals manufacturers. Actively planning for this scenario, whilst retaining the ability to be innovative and flexible, will be the key to future success, whereas batoning down the hatches and trying to ride out the storm will only lead to difficulties.

Chemical Manufacturers Look to the Future

Chemical Manufacturers are taking decisive actions to position themselves for the future. According to Price Waterhouse Cooper's 13th Annual Global CEO Survey, chemical companies are responding to the current challenges in a number of ways:

• Companies are increasingly looking to Asia and expect operations to grow in this area
• The level of M&A activity is expected to increase
• Companies see innovation as being essential to future growth
• Comapnies are spending more to develop leaders and in-house talent
• Cost cutting and infrastructure improvements are essential

The comments absolutely reflect the need for a coherent and strategic approach to survive and thrive in these turbulent times. As noted previously, excellent strategic planning, in-built flexibility and the ability and desire to innovate will be the key attributes of successful companies.

Paul Hodges' Chemical Industry Outlook

My colleague, Paul Hodges has correctly predicted the key economic events that have shaped the chemical industry in recent years. Here is a short video from ICIS, featuring Paul, sharing his views on the 2010 outlook for the industry

Poor Demand In Construction Sector Threatens Chemical Manufacturers

photo : diamond.ac.uk

Whilst all chemical manufactuers are hoping for a better year in 2010, recent figures from the US indicate that demand remains very slack in the non-domestic construction sector, a major market for polymer and chemical manufacturers.

According to the American Chemistry Council (ACC), some 20% of spending in construction projects goes on chemicals and plastics and the figure is set to increase as buildings 'go green' with improved insulation, solar power etc.

The Associated General Contractors of America (AGC) has painted a negative picture in a number of recent press releases. In particular, the AGC recently released a construction industry outlook in which nine out of ten contractors stated that they believe that there will be no construction recovery in 2010.

This a big concern. Demand for chemical products relies on consumer demand, with construction and automotive being particularly important sectors. This downbeat assessment does not make happy reading for the chemical industry.

Cap and Trade Under Pressure as Republicans Win in Massachusetts

photo : Cleveland.com

The recent victory of Scott Brown in the recent US Senate by-election in Massachusetts is likely to put further pressure on the proposed Cap and Trade legisation.

The new senator actively campaigned against the legislation and his election reduces the Democrat majority in the Senate, making such bills harder to pass.

The election is significant. Brown highlighted two main issues in his campaign - the proposed healthcare reforms and cap and trade. His victory reflects the increasing concern voiced by the US chemical industry regarding the likely impact of cap and trade on industry and jobs.

It is being suggested that the bill could be watered down to focus on renewable energy alone. This blog has long promoted a sustainability agenda and agrees that increased use of renewables should be one element of this approach. There should also be a strong focus on new technologies to reduce energy consumption and waste. The chemical industry should be aiming for efficiency on a global basis. Regional schemes, such as cap and trade in its current form, are not the solution.

Paper Recycling Facility to be Built at Carrington UK

photo : bloglemu.blogspot.com

The Spanish company Sociedad Anónima Industrias Celulosa Aragonesa (Saica) has announced it will spend £290million to build a new paper recycling facility in Carrington, near Manchester, UK.

Construction will begin later this year and the facility is due to start-up in  2012. The plant will produce 400,000 t/y of 100% recycled board for use in corrugated cardboard. The investment will include advanced effluent treatment works and a combined heat and power station.

Carrington is the site of the petrochemical complex, formerly operated by Shell Chemicals, which at its peak, employed some 3500 staff. The paper mill itself is located on the site of a former BP distribution terminal, located alongside the Manchester Ship Canal.

This is very good news for an area which has seen multiple chemical plant closures in recent years. LyondellBasell shut down an LDPE plant at Carrington at the end of 2009 and NOVA Innovene (now Ineos NOVA) shut down a PS plant at the end of 2006. As someone who worked at Carrington for many years, I'm delighted to see new investment in the area.