Scotland's Only Oil Refinery to Close: Impact and Future Plans

Grangemouth, Scotland's sole oil refinery, will close in 2025, affecting 400 jobs. Operator Petroineos is converting the site into a fuels import terminal. The site has faced economic difficulties, with significant losses over the years, prompting the closure. The decision has sparked opposition from trade unions and local politicians.

Grangemouth, Scotland's only oil refinery, is set to close in 2025, resulting in the loss of 400 jobs, according to operator Petroineos. This move is part of plans to transform the 100-year-old Grangemouth site into a fuels import terminal.

The decision comes after Petroineos announced in November that it was preparing to shut Britain's oldest refinery. Production is expected to cease in the second quarter of next year, pending employee consultations.

The site will be converted into an import and distribution terminal for finished fuels, reducing the workforce from 475 to about 75 over the next two years. The joint venture between PetroChina International London and INEOS Group cited economic difficulties as the reason for the closure, having invested $1.2 billion since 2011 but returning losses exceeding $775 million in the same period.

Petroineos indicated that Grangemouth, unable to compete with newer, more efficient refineries in the Middle East, Asia, and Africa, incurs high capital expenditures yearly to maintain its operating license. The closure, opposed by trade unions and local politicians, could impact the local economy and Scotland's energy security.

Grangemouth processes North Sea Forties crude oil and U.S. WTI Midland, both significant to the Brent global oil benchmark. Despite the refinery's closure, Ineos's other operations around the site, including the Olefins and Polymers petrochemical plant and the Forties Pipeline System, will continue as usual.

(With inputs from agencies.)