Ineos set to announce Grangemouth expansion following fracking gas influx

A ramping up of activities at Grangemouth would represent a remarkable turnaround for the facility, which includes a petrochemical plant, the country's only oil refinery and accounts for four per cent of Scottish GDP.

Less than three years ago, Ineos said it would be closing its plant following a bitter industrial dispute in a move met with dismay at the highest levels of UK and Scottish Governments.

However, the company says regular deliveries of fracking gas from America on eight purpose built ships have handed Grangemouth, previously operating at half-capacity due to dwindling North Sea gas reserves, a lifeline. Ineos believes the plant will now make £100m a year due to the influx of shale gas, used as a feedstock for its petrochemical products.

The imports have been criticised by environmental groups and reignited the debate over whether fracking should be allowed in Scotland, with Nicola Sturgeon refusing to endorse the £1.5 billion Ineos project despite the company claiming it has saved 10,000 jobs directly and indirectly dependent on Grangemouth.

Mr Carmichael said: "The site was losing money and it’s [now] a site that will make money, we’ve already announced the expansion of a plant down in Hull because we’ve got cheap ethylene. We’re most probably going to announce an expansion of Grangemouth. It [shale gas] provides a long term, sustainable future for the site.

"If we can find it in the states, bring it over, secure a site, imagine what you could do if it was on your doorstep."

Pushed to provide further details on the proposed expansion, he added: "If you’re sat on an asset that has a sustainable, cheap source of feedstock that is competitive with the rest of Europe in a market, plastics, which is growing, it’s cheaper to expand an asset rather than build a new one. I know we’re looking at it so we’d hope to be announcing something."

SNP ministers faced criticism after refusing to attend a celebration of the first shipment of US shale gas to Grangemouth on Tuesday, a move that has soured relations between the Government and one of the country's most important firms. The Government blamed previous commitments, despite several ministers being invited three weeks in advance.

Mr Carmichael said Ineos "didn't understand" why no SNP minister Government turned up to what he described as one of the most significant events in recent Scottish industrial history. He added: "You invite them, they don’t turn up, that’s up to them."

Ineos has obtained fracking exploration licences for large swathes of central Scotland but has so far been blocked by a Scottish Government moratorium, announced last year. It will remain in place until an evidence gathering programme and consultation have been carried out.

Earlier, expert speakers at the conference hit out at the quality of the public debate over fracking, saying it appeared to be more of an argument than grown-up discussion.

Mark Lappin, who has experience of onshore gas exploitation projects across Europe, said: "It seems we want cheap, reliable energy, but we don't want it to come from here. We're importing as we speak gas from North America, gas from Qatar. If we want to do that, that's fine.

"But we have to accept the consequences about what that means for revenue, jobs, about how well off we are and how well we can support those in fuel poverty."

Patrick Harvie, the co-convenor of the Scottish Greens, told the conference that fracking remained deeply unpopular with the public and confidently predicted the SNP would ban it.

Calling for the fossil fuel to be "left in the ground" as part of moves to tackle climate change, he added: "The SNP don't like having these internal tensions that play out in public. I think it's implausible to imagine they would change the position in favour of shale gas extraction without suffering intolerable levels of opposition from within their own ranks."