Natural Gas Prices Surge; INEOS Shuts Down Three UK Plants

British billionaire Jim Ratcliffe announced today that he would suspend operations at three UK plants owned by his petrochemical giant, Ineos, due to “outrageously high” natural gas prices in Europe.

AFP reports that Ratcliffe stated: “We are being forced to shut down some of the most efficient plants in Europe; with natural gas prices now 12 times higher than in the US and eight times higher than in China, we simply cannot compete.”

Ineos stated that the three plants, located in the northeastern port city of Hull, “support nearly 4,000 highly skilled jobs.”

The company added that these “idled plants are the last remaining world-scale acetyls production facilities in Europe,” manufacturing a range of raw materials used in pharmaceuticals, clothing, cosmetics, construction materials, and military explosives.

Since the outbreak of conflict in the Middle East in mid-February, European natural gas prices have doubled and are currently hovering around €75 per megawatt-hour (MWh).

However, as winter approaches and demand for fuel supplies rises, natural gas prices could climb further—though they remain well below the record high of €300 per megawatt-hour reached after Russia’s full-scale invasion of Ukraine in 2022.

Ratcliffe stated that persistently high natural gas prices “also impose a heavy environmental burden, as alternatives supplied by the U.S. result in double the carbon emissions, while those from China generate eight times as much.”

He added: “European regulators must recognize the fact that high energy costs and the additional burden of unsustainable carbon taxes are destroying the foundations of European manufacturing.”

A UK government spokesperson stated that Ineos’s decision marks a “worrying time” for employees and their families. However, the government emphasized that it has “taken bold action to support the chemical industry, including injecting £350 million in funding into strategically important chemical manufacturers.”