Grangemouth: Scottish oil refinery to close with hundreds of jobs at risk

It is the only operating crude oil refinery in Scotland, and one of only six remaining in the UK.

Operations at the refinery are expected to cease in under 18 months in spring 2025.

Owners Petroineos, a joint venture between PetroChina and Ineos, said the site would now become an import and distribution hub.

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According to STV News, the owners spoke with the Scottish Government and unions on Tuesday after briefing staff earlier in the day.

In an email to staff, refinery manager Russell Mann said: “We anticipate that works necessary for import flexibility at Finnart and Grangemouth will take around 18 months to complete and our current intention is to continue refinery operations until spring 2025, and potentially beyond.”

Mann said plans to transition Grangemouth into an import terminal had been ongoing for months.

He added that the message to staff “marks the start of a regular programme of engagement with all colleagues on the changing nature of our business”.

The business said demand for the fuels it produces was expected to decline and that the energy transition was well under way. 

Petroineos said it faced a future of "unsustainable levels of losses".

Reacting to the news, Ewan Gibbs – a lecturer at the University of Glasgow – said: “Oil has been refined at Grangemouth for a century.

“Its opening marked the beginnings of a major energy transition away from the coal and shale mines that surrounded the terminal to petroleum. Closure will leave Scotland as a significant oil producer with no refining capacity.”

Scottish Greens MSP Gillian Mackay said on Twitter/X: "I grew up less than 200 yards from the plant and I can tell you that workers at the plant are bewildered, betrayed and furious at finding out about this on the internet long after shareholders were made aware.I am calling for an urgent summit to be held!"

Tory MSP Murdo Fraser (above) meanwhile said: "This is a huge blow to the Scottish economy. Grangemouth supports hundreds of jobs and many more in the supply chain.

"Its loss blows a hole in our industrial base."

Meanwhile, Unite the union said it is continuing to engage with Petroineos and pledged to leave "no stone unturned in the fight for jobs".

Its general secretary Sharon Graham said: "This proposal clearly raises concerns for the livelihoods of our members but also poses major questions over energy supply and security going forward. 

"Unite will leave no stone unturned in the fight for jobs."

The union also urged both the Scottish and UK Government to consider the implications of the company's proposals.

Franck Demay, chief executive officer at Petroineos Refining, said: “This does not change anything for our operation today, where it is business-as-usual at the Grangemouth refinery. We currently anticipate continuing refinery operations 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. As a prudent operator, we must plan accordingly, but the precise timeline for implementing any change has yet to be determined.

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“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.

“Throughout this process, our focus will remain on the safe production and reliable supply of high-quality fuels to our customers in Scotland, the north of England, and Northern Ireland.

“As we start to make this investment in preparing for a future transformation, we are equally committed to a regular programme of engagement with our colleagues about the changes we are making to our business.”

As part of the plans communicated to staff, Petroineos is also evaluating a range of low-carbon opportunities for Grangemouth, including the feasibility of a bio-refinery facility on the site.

The company is working closely on this project with a range of interested parties, including the Scottish and UK governments, and said it will provide more information in due course.

Elsewhere, Alex Salmond expressed his frustration that the topic had not been brought up at PMQs. 

"Not a single Scottish MP called at Prime Minister's Questions saw fit to raise the issue of the closure of Grangemouth refinery while the Scottish Government look asleep at the wheel," he said. 

"They need to act now with urgency to secure Scotland's industrial and energy base."

This story previously stated that Grangemouth was responsible for 4% of Scotland's GDP and 8% of its manufacturing base. This was based on figures from Petroineos, which have now been flagged as incorrect by the Fraser of Allander Institute. Petroineos has also deleted the figure from its website.