Grangemouth, Scotland's only oil refinery, is to close in 2025 with the loss of 400 jobs, operator Petroineos said on Thursday, as part of plans to turn the 100-year old Grangemouth site into a fuels import terminal.
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.
Petroineos cited economic difficulties as the reason for the closure, stating that the company had invested $1.2 billion since 2011, and returned losses in excess of $775 million over the same period.
It said the plant is currently losing around $500,000 per day, and expects to see a $200 million loss 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.
Petroineos's plans to cease refining at Grangemouth were opposed by trade unions and local politicians over its impact on the local economy and Scotland's energy security.
The Grangemouth oil refinery processes mainly North Sea Forties crude oil, which it has a direct link to via the Forties Pipeline System (FPS), and U.S. WTI Midland. Both of those crude oil grades help to underpin the Brent global oil benchmark, meaning the refinery's closure could have wider significance for the oil market.
Ineos said it is "business as usual" for its other operations around the Grangemouth site, namely the Ineos Olefins and Polymers petrochemical plant and the FPS.
