LONDON, Sept 12 (Askume) – Scotland’s only refinery at Grangemouth will close in 2025, cutting 400 jobs, operator Petrocos said on Thursday, ahead of plans to convert the 100-year-old plant into a fuel import terminal. The move has been taken.
Petroineos said in November it was preparing to shut the Grangemouth refinery, Britain’s oldest refinery. A company spokesman said production would cease in the second quarter of next year after consultation with employees.
The decision was criticised by unions and politicians.
UK Energy Secretary Ed Miliband said: “It is extremely disappointing that Petronios has maintained its previous decision to close the Grangemouth refinery.”
The plant will become an import and distribution terminal for finished fuel and will reduce its workforce from 475 to about 75 people over the next two years.
PetroIneos is a joint venture between PetroChina International London (PCIL) and the British chemicals company Ineos Group, founded by billionaire Sir Jim Ratcliffe.
The company cited financial difficulties as the reason for the closure, saying it had invested $1.2 billion since 2011 and lost more than $775 million over the same period.
The company said: “Grangemouth cannot compete with larger, more modern and efficient factories in the Middle East, Asia and Africa. Due to its size and configuration, Grangemouth must meet high standards every year to retain its operating licence.
The plant is currently losing about $500,000 a day and is expected to lose $200 million by 2024, he said.
Petroineos has faced opposition from unions and local politicians over its Grangemouth plans and has launched a campaign to halt production until a low-carbon option is found for its long-term future.
The British and Scottish governments on Thursday announced a joint plan that includes a 100 million pound ($130.43 million) financial package to secure the industry’s future following the closure of the Grangemouth refinery.
The funding will be used to provide career support for affected workers and investment in local energy projects.
Miliband said: “We have announced an investment package to help the workforce find good alternative employment, invest in the community and deliver a viable industrial future for the Grangemouth site.”
Unite, the union representing Grangemouth workers, described the closure as “an act of industrial sabotage”.
Derek Thomson, general secretary of Scottish Unity, said: “This complex is vital to the country’s manufacturing base and energy security.”
Market Decay
Petronas Refining chief executive Frank Dame said demand for fuel produced at Grangemouth had started to fall.
“With restrictions on new petrol and diesel cars coming into effect over the next decade, we expect the market for these fuels to shrink further,” he added.
The refinery primarily processes North Sea Forties crude oil and is directly linked to US WTI Midland via the Forties Pipeline System (FPS).
Both crude grades help support Brent, the global oil benchmark, meaning refinery shutdowns could have a wide impact on oil markets.
Ineos said its other plants around the Grangemouth site, namely the Ineos Olefins and Polymers petrochemicals plant and the FPS, were “operating normally”.
The new Labor government has committed funding to consider potential low carbon projects at the site. The study identified three potential long term options, including low hydrocarbons, clean e-fuels and sustainable aviation fuel.
Unite said it was in talks with the Government about the site, including the possibility of sustainable aviation fuel production.
($1 = 0.7667 British pounds)
