Major British chemical plant faces closure as energy prices soar
One of Britain's biggest chemical plants is at risk of closure after the site's Saudi owners paused a multimillion-pound upgrade project.
The Olefins 6 'cracker' facility in Teesside, controlled by Sabic, employs hundreds of workers and had been undergoing a major conversion to run on gas feedstock.
But Sabic paused that work months ago and is now understood to be on the verge of announcing the plant's closure amid spiralling costs and concerns about high energy prices.
The company, which is owned by Saudi state oil giant Aramco, has not responded to a request for comment.
However, bosses recently said they were looking to scale back their European presence or exit the region entirely. Another cracker in the Netherlands was shuttered last year.
The closure of one of the UK's most significant chemical plants would deal a fresh blow to the Government as it prepares to unveil its industrial strategy.
Earlier this year, chemical company bosses warned Jonathan Reynolds, the Business Secretary, to expect mounting closures as the industry reached 'breaking point'.
Sir Jim Ratcliffe, one of Britain's richest men, has also warned the UK's multibillion-pound chemicals industry faces 'extinction' because of soaring energy costs and the shift to net zero.
Sources close to Sabic suggested the plant's closure was partly due to Britain's high energy prices as well as the perceived lack of interest shown by the Government in the crisis-hit sector.
Olefins 6 is the second-largest cracker in Europe and has been a feature on the Teesside skyline since it began operating in the late 1970s, notable for its bright flaring. The plant uses extreme heat to break down, or 'crack', hydrocarbons into ethylene, a raw material used by other neighbouring Sabic plants.
Jos Visser, site director of Sabic's Teesside operation, confirmed to local newspaper TeessideLive that the cracker's conversion had been 'paused' but insisted it had not yet been mothballed.
He said the company needed to 'reaffirm the business case', adding: 'Also, we needed to understand what the cost was of completing project from where we were at that moment.
'I think you see more companies holding back their new investment plans to sort of wait and see how the market is going to develop. We're exactly in that position.'
However, sources warned an announcement may be imminent.
An email sent this week to employees at Wilton International, which runs nearby facilities and counts Sabic as a major client, said the company had been advised that 'no decision has been taken'.
Ben Houchen, the Mayor of Tees Valley, said he was seeking urgent talks with Sabic executives to see whether local jobs could be saved.
He added: 'This is concerning news that I know will cause uncertainty for those employed within the chemical sector in Teesside.
'Teesside was built on its industrial heritage and whilst this is a decision that has been taken overseas, I will be fighting with everything I have to try and safeguard our chemical sector.
'The Government cannot allow the chemical industry to fail on their watch. Their Industrial Strategy cannot be defined by industrial failure. They must act and save these good quality jobs.'
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