UK government guarantees Grangemouth upgrade loan

The UK will guarantee a 230-million-pound ($394 million) loan for an upgrade of Ineos AG’s petrochemical plant at Grangemouth in Scotland, protecting jobs ahead of September’s independence referendum.

The loan guarantee will allow Ineos to start work immediately on building Europe’s biggest ethane storage tank.

“The Grangemouth guarantee is fantastic news for Scotland’s economic future, and for the UK’s energy security,” said chief secretary to the treasury, Danny Alexander. “Our action is creating the right conditions for more investment in our infrastructure, helping to build a stronger economy and a fairer society across the country.”

The loan will secure thousands of jobs, and the work is vital if the refinery is to continue operating after 2017, says the treasury. The announcement comes as ministers are seeking to press the benefits of Scotland staying part of the UK ahead of the September 18th independence referendum.

Alexander, who represents a Scottish seat in the House of Commons, and chancellor of the exchequer, George Osborne, have repeatedly made the economic case for the union.

Ineos, a British company which relocated to Switzerland for tax purposes, is pioneering the import of cheaper ethane from the US as North Sea production wanes and higher energy and feedstock costs squeeze commodity chemical producers in western Europe. The Grangemouth plant, the company’s biggest, combines both chemical production and oil refining.

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