Scotland's Grangemouth Refinery Hit by Unit Closures and Job Cuts

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Petroineos Refining has announced plans to permanently shutter two processing units at its Grangemouth integrated refinery complex on the Firth of Forth in Scotland.

The move threatens up to 200 jobs at Grangemouth, which employs 637 people. The company stated that the global refining industry is facing "huge challenges" as increasing electrification of the transport fleet and more fuel-efficient vehicles "leads to reduced demand for fuel, a trend that has been accelerated this year by the COVID-19 pandemic." Grangemouth is one of only six refineries left in the U.K. and the only one in Scotland, with a capacity of 210,000 barrels per day (BBL/d). The company said that it will mothball CDU 1 (Crude Distillation Unit) and the FCCU (Fluidised Catalytic Cracker Unit). The units have been closed throughout the COVID pandemic due to significantly reduced local and international demand for fuels.

Franck Demay, chief executive officer, Petroineos Refining, said, "As a national critical infrastructure it is vital we retain a productive capacity of fuels in Scotland. For almost a century the Grangemouth refinery has reliably produced high-quality fuels for the domestic market and for export. We firmly believe that only by taking action now will we preserve one of Scotland's last large manufacturing sites and a significant contributor to the Scottish economy."

The company said its plans to reconfigure its Grangemouth site to meet current demand for fuels will help "protect 450 skilled roles." The new changes "reflect a global decline in demand for fuels" and will align its refining capacity to meet local demand in Scotland, Northern England and Northern Ireland. The refinery is connected to the Forties Pipeline System (FPS) for its crude oil intake from the North Sea and connected to Finnart Ocean Terminal for crude oil import and finished products export. Products produced at Grangemouth include liquefied petroleum gas, naphtha, gasoline (petrol), jet fuel, kerosene, diesel, gas oil, and fuel oil. Petroineos is a 50:50 joint venture between Ineos and Chinese state oil company PetroChina.

European refineries are facing a grim future thanks to falling demand and COVID-19. Energy trading firm Gunvor Group said in June that it is planning to mothball its 115,000-BBL/d Antwerp refinery in Belgium due to ongoing losses and falling demand. In August, Industrial Info reported that French oil and gas major Total SE had inked a deal to shed its U.K. downstream business including its 109,000-barrel-per day BBL/d Lindsey Oil Refinery in North Killingholme, Immingham, Lincolnshire, and associated logistics assets to Prax Group. For additional information, see August 19, 2020, article--Total Sells U.K. Refining and North Sea Oil & Gas Assets.

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