PetroIneos said on Wednesday it is preparing to shut down its Grangemouth oil refinery in Scotland to convert it into a fuels import terminal as it faces growing international competition.
The 150,000 barrel per day refinery, Scotland's only oil refinery and one of six in Britain, is expected to continue operating until spring 2025, PetroIneos said in a statement.
Although it is a major supplier of fuels, such as gasoline, diesel and aviation fuel to Scotland, the plant has faced significant challenges due to growing global competition, particularly from newly-built refineries in Asia and the Middle East.
PetroIneos will soon start preparatory work to enable the future transformation of its Grangemouth refinery into a fuels import terminal, it said in a statement.
The timescale for the shutdown is yet to be determined exactly but the preparatory work is expected to take around 18 months, with the refinery expected to continue operating until spring 2025.
"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.
The plan includes converting the site of the refinery into a fuels import hub.
Converting refineries into storage terminals is often far cheaper than a full shutdown as the operator is not required to fully restore the land to its former state.
The company will also seek to convert its existing export terminal at Finnart, which is linked to Grangemouth by cross-country pipelines, into a diesel import facility.
PetroIneos said it is also evaluating a range of low-carbon opportunities for Grangemouth, including the feasibility of a bio-refinery facility on the site.
PetroIneos is a 50-50 joint venture between petrochemicals giant Ineos and PetroChina (601857.SS). It also owns the Lavera refinery in southern France.
