Grangemouth, Scotland’s only oil refinery, is to close in 2025 with the loss of 400 jobs, operator Petroineos has said, according to Reuters, as part of plans to turn the 100-year-old plant into a fuels import terminal.
Petroineos said last November it was preparing to shut down Grangemouth, Britain’s oldest refinery. Production will cease in the second quarter of next year, subject to an employee consultation, a company spokesperson said.
The move is driven by global competition and declining fuel demand.
Petroineos stated that the decision will safeguard Scotland’s future fuel supply but has raised concerns about the local economy and job market.
The refinery has been a vital part of Scotland’s industrial landscape since its establishment in 1924 by BP.
Over the years, it expanded into petrochemical production becoming a key supplier of aviation fuel for Scotland’s major airports, and petrol and diesel fuels for the Central Belt.
However, changes in the global energy market and the refinery’s inability to compete with more modern sites in Asia, Africa, and the Middle East have led to its impending closure.
Petroineos is a joint venture between PetroChina International London (PCIL) and INEOS Group, a British chemicals firm founded by billionaire Sir Jim Ratcliffe.
Petroineos said $1.2 billion had been invested in Grangemouth since 2011, with losses of more than $775 million during the same period, Reuters reported. The company said the plant is suffering losses of approximately $500,000 daily, with a $200 million loss expected for 2024.
“Grangemouth is increasingly unable to compete with bigger, more modern and efficient sites in the Middle East, Asia and Africa. Due to its size and configuration, Grangemouth incurs high levels of capital expenditure each year just to maintain its licence to operate,” the company said.
Demay said demand for the fossil fuels produced at Grangemouth was falling. He added that the ban on new gas-powered and diesel cars coming into force in the next decade meant the market for fuels produced at the site would continue to shrink.
The UK and Scottish governments announced a joint plan on Thursday, including a 100 million pound ($130.43 million) financial package, to secure an industrial future for Grangemouth after the refinery closes.
This will go towards career support for affected workers as well as investments in local energy projects.
We are announcing a package of investment to help the workforce find good, alternative jobs, invest in the community and serve a viable industrial future for the Grangemouth site,” Miliband said.
Trade union Unite, which represents workers at Grangemouth, described the closure as an “act of industrial vandalism.”
The complex is critical to the nation’s manufacturing base and energy security,” Unite Scottish secretary Derek Thomson said.
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