Scotland’s only oil refinery to close in 2025

The Grangemouth refinery, Scotland’s only crude processing facility, is to close in the second quarter of 2025, its owners confirmed on Thursday, as the refinery struggles to compete with complex new facilities in Asia, Africa and the Middle East.

The Grangemouth refinery, which was opened by BP’s predecessor in 1924, expanded its production into petrochemicals in the 1950s.

However, the 150,000-barrel-per-day (bpd) facility has been unable to compete with the massive new refineries that major oil and refining firms have built in Asia and the Middle East in recent years.

Refinery owner Petroineos, a joint venture between PetroChina and INEOS, announced on Thursday its intention to cease operations at the Grangemouth refinery and switch to a finished fuel import and distribution terminal in the second quarter of 2025 under subject to consultation with employees.

But “INEOS businesses at Grangemouth, namely INEOS O&P UK and INEOS FPS (Forties Pipeline System), will continue as normal to deliver high quality services and products to our customers and are largely unaffected by this change,” INEOS said today.

The closure of the refinery will result in the loss of 400 jobs as the number of employees at the site would be reduced to 75 from 475.

Turning the site into a fuel import terminal would “protect the fuel supply for Scotland”, but this terminal would require fewer than 100 staff, according to the company.

Some major oil firms, including Shell and Eni, have recently announced that they will convert refineries in Europe to meet demand for base oil and biofuels.

In January 2024, Italian company Eni said it would convert its Livorno refinery into a biofuel production facility, in a second announcement of the upcoming closure of a European oil refinery in less than a week.

Eni’s announcement came days after Shell said it planned to convert its oil refinery at the Wesseling site in Germany into a production unit for base oils.

By Charles Kennedy for Oilprice.com

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