In a launch despatched to Rigzone lately, Petroineos “confirmed its intention to stop refinery operations at Grangemouth through the second quarter of 2025”.
The corporate highlighted within the launch that, final November, it “outlined plans to remodel the Grangemouth refinery web site right into a completed fuels import terminal and distribution hub as a way to safeguard Scotland’s provide of fuels for the longer term”.
Petroineos said within the launch that an import terminal requires considerably fewer individuals to function than a refinery. It added that Petroineos will this month enter a proper session course of with the positioning’s 475 workers and their representatives on the small print of the transformation plan, which the corporate mentioned is predicted to result in a web discount of roughly 400 roles over the subsequent two years.
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Grangemouth Refinery is among the six remaining refineries within the UK and the one refinery in Scotland, Petroineos’ web site notes, highlighting that the positioning has a refining capability of 150,000 barrels per day.
“Grangemouth is the UK’s oldest refinery and presently faces vital challenges attributable to international market pressures and the power transition,” Petroineos mentioned in its launch.
“Refining is a globally aggressive trade and Grangemouth is more and more unable to compete with larger, extra fashionable and environment friendly websites within the Center East, Asia, and Africa,” it added.
“As a result of its dimension and configuration, Grangemouth incurs excessive ranges of capital expenditure annually simply to take care of its license to function. This annual outlay on important deliberate upkeep and working repairs has been persistently greater than the corporate’s earnings over the previous decade,” it continued.
Frank Demay, Chief Govt Officer at Petroineos Refining, mentioned within the launch, “the power transition is occurring now and it’s taking place right here”.
“Demand for key fuels we produce at Grangemouth has already began to say no and, with a ban on new petrol and diesel vehicles attributable to come into drive inside the subsequent decade, we foresee that the marketplace for these fuels will shrink additional,” he added.
“That actuality, aligned with the price of sustaining a refinery constructed half a century in the past, means we’re exploring methods to adapt our enterprise,” he continued.
Demay mentioned, “the motion we’re taking to create an import terminal will safeguard gasoline provide for Scotland”.
“We presently count on Grangemouth to be able to function as a nationwide distribution hub for completed fuels in Q2 subsequent yr,” he added.
Demay famous within the launch {that a} terminal would require solely round one-fifth of the present refinery workforce.
“Due to this fact we’ll quickly enter an info and session course of with representatives of our workers to debate the proposals,” he mentioned.
“We’ve got already agreed to maneuver from the UK statutory minimal redundancy phrases to an 18-month bundle and if plans proceed we intend to do every part we are able to to scale back the affect on our individuals,” he added.
“We’ll after all be looking for to reduce obligatory redundancies so far as attainable,” he went on to state.
Petroineos said within the launch that, whereas getting ready the refinery web site for the transition to an import terminal, it’s concurrently working with UK and Scottish governments to investigate choices for Grangemouth to change into a low-carbon fuels manufacturing hub.
An preliminary feasibility research, generally known as ‘Undertaking Willow’, is assessing numerous low-carbon alternatives from technical, financial, industrial, regulatory, surroundings, group and abilities views, the corporate mentioned within the launch.
In an announcement despatched to Rigzone lately, UK union Unite “vowed to discover all avenues to protect prime quality jobs at Grangemouth”.
“Petroineos confirmed … that it intends to shut the refinery at Grangemouth between April – June 2025 and change into an import and export solely facility,” the union added.
“The announcement locations in jeopardy the roles of the five hundred employees immediately employed (represented by Unite) at Grangemouth and 1000’s extra within the provide chain,” it continued.
“There may be widespread fury inside the office as a result of failure of the bosses and politicians to make sure the way forward for the positioning,” it went on to notice.
Within the assertion, Unite Common Secretary Sharon Graham mentioned, “this devoted workforce has been let down by Petroineos and by the politicians in Westminster and Holyrood who’ve failed to ensure manufacturing till different jobs are in place”.
“That is now the final probability for this Labour authorities to point out whether or not it’s actually on the aspect of employees and communities. The street to web zero can’t be paid for with employees’ jobs,” Graham added.
“The federal government should put its cash the place its mouth is to make sure the roles are safeguarded. That is the one refinery left in Scotland and it should stay. There are different plans,” Graham continued.
Unite mentioned within the assertion that it’s now in excessive degree talks with the federal government about options for the positioning together with the manufacturing of sustainable aviation gasoline.
Rigzone requested Petroineos, the UK Division for Power Safety and Internet Zero (DESZN), and Scotland’s Power and Local weather Change Directorate for touch upon Unite’s assertion.
Petroineos responded with its launch. DESZN additionally despatched Rigzone a launch in response.
The discharge despatched by DESZN famous that the UK and Scottish governments have introduced a joint funding plan for Grangemouth following Petroineos’ choice to decommission its oil refinery.
“The UK authorities has been working with the Scottish authorities to ship an funding plan that can assist safe Grangemouth’s industrial future and shield its expert workforce,” the discharge mentioned.
This features a GBP 100 million ($131.9 million) bundle that can “assist the group and its employees”; “quick profession assist for employees”; and “funding within the web site’s long-term future”, the discharge outlined.
The discharge said that the GBP 1.5 million ($1.9 million) joint-funded Undertaking Willow research has recognized a shortlist of three credible choices to start constructing a brand new long-term trade on the refinery web site, together with low carbon hydrogen, clear eFuels, and sustainable aviation fuels.
Within the launch, UK Authorities Power Secretary Ed Miliband mentioned, “it’s deeply disappointing that Petroineos have confirmed their earlier choice to shut Grangemouth oil refinery”.
“We’ll stand with the workforce in these tough instances, that’s the reason we’re asserting a bundle of funding to assist the workforce discover good, different jobs, make investments in the neighborhood and serve a viable industrial future for the Grangemouth web site, with potential for future assist from the Nationwide Wealth Fund,” he added.
“The federal government is working in lockstep with the Scottish authorities throughout each entrance. Staff and their households ought to be in little question this can be a authorities that stands with employees, commerce unions, and companies to combat for jobs and funding in Scotland,” he continued.
Scottish Authorities Cupboard Secretary for Internet Zero and Power Gillian Martin mentioned within the launch, “my quick ideas are with the workforce”.
“This can be a very difficult time for them and their households, and we’ll assist each employee affected by this choice,” Martin added.
“We’re working very carefully with the UK authorities and collectively we’ve communicated our disappointment to Petroineos right this moment,” Martin continued.
Martin mentioned within the launch that the Scottish authorities has persistently made clear its desire was for refining to proceed so long as attainable, including “we’ve continued to press the shareholders for a constructive choice till the eleventh hour”.
Martin additionally famous that the “vital bundle of assist combines quick assist for affected employees and a long-term contribution to make sure that Grangemouth continues to thrive sooner or later”.
“We’re clear that there ought to be a simply transition for the refinery web site and we stay dedicated to bringing ahead low carbon alternatives that can maintain expert jobs throughout the broader space for a few years to come back,” Martin mentioned.
Rigzone has requested Petroineos for touch upon the discharge despatched to Rigzone by DESZN. On the time of writing, Petroineos has not but responded to Rigzone’s request.
To contact the creator, electronic mail andreas.exarheas@rigzone.com
