Petroineos revealed on Thursday that Scotland’s only oil refinery, located in Grangemouth, will cease operations in 2025.
It said last November it was preparing to shut Grangemouth, Britain’s oldest refinery.
“As the energy transition gathers pace, this is a necessary step in adapting our business to reflect the decline in demand for the type of fuels we produce,” Franck Demay, CEO at PetroIneos Refining, said.
Production will cease in the second quarter of next year, subject to an employee consultation, a company spokesperson said.
This closure will result in the loss of approximately 400 jobs, dealing a significant blow to the local economy.
The refinery, which has been in operation for over 100 years, has been struggling financially, with Petroineos citing economic difficulties as the reason for the closure.
Despite investing $1.2bn since 2011, the company has incurred losses exceeding $775m over the same period.
Petroineos has stated that the “Grangemouth site is unable to compete with larger, more modern, and efficient refineries in the Middle East, Asia, and Africa”. The company plans to convert the site into a fuels import terminal, retaining only 75 jobs.
“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.
It added the plant is currently losing around $500,000 per day and expects to see a $200m loss in 2024.
Trade unions and local politicians have expressed strong opposition to the closure, highlighting concerns about the impact on the local economy and Scotland’s energy security.
“It is deeply disappointing that Petroineos have confirmed their previous decision to close Grangemouth oil refinery,” UK Energy Secretary Ed 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.
The site will become an import and distribution terminal for finished fuels, which will cut the number of employees at the site from 475 to around 75 over the next two years.
Petroineos is a joint venture between PetroChina International London (PCIL) and INEOS Group, a British chemicals firm founded by billionaire Sir Jim Ratcliffe.
Scotland’s Only Oil Refinery To Close In 2025 is first published on The Whistler Newspaper