PetroIneos, a joint venture between petrochemical companies Ineos and PetroChina, is preparing to shut down its Grangemouth facility, the only oil refinery in Scotland.
The company is planning to convert the refinery into a fuel import terminal, which is expected to require around 18 months and affect at least 400 jobs.
Grangemouth oil refinery, with a capacity to process 150,000 barrels per day, is a major supplier of fuels, such as gasoline, diesel, and aviation fuel to Scotland.
The facility, which is expected to continue operating until spring 2025, is facing major challenges from growing competition, especially from new refineries in Asia and the Middle East.
PetroIneos has not yet finalised an exact timeframe for the shutdown but planning to start preparatory work immediately, to enable the future transformation of the Grangemouth refinery.
Petroineos refining chief executive Franck Demay said: “The company was considering some “low-carbon opportunities” for the site, including a possible bio-refinery facility.
“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.
“As a prudent operator, we must plan accordingly, but the precise timeline for implementing any change has yet to be determined.
“This is the start of a journey to transform our operation from one that manufactures fuel products, into a business that imports finished fuel products for onward distribution to customers.”
PetroIneos is also planning to convert its existing export terminal at Finnart, which is linked to Grangemouth by cross-country pipelines, into a diesel import facility.
The company is also evaluating several low-carbon opportunities for Grangemouth, including the feasibility of a bio-refinery facility on the site.
Scotland energy secretary Neil Gray said: “The decision by Petroineos was a commercial one for the company and the government in Edinburgh was committed to ensuring that there was a long-term future for Grangemouth.
“This is a commercial decision and it is our understanding that these works will future-proof the site to allow it to continue as an important fuel supply source for years to come.”
