PetroChina/Ineos to close jv refinery plant in Scotland; Ineos to continue at Grangemouth
Petroineos Refining Ltd. (PRL), a joint venture of Ineos Group’s Ineos Investments (Jersey) Ltd. (50.1%) and China National Petroleum Corp.’s PetroChina Co Ltd (PetroChina) subsidiary PetroChina International (London) Co Ltd (49.9%), has decided to permanently shut down its 150,000-barrels/day Grangemouth refinery complex on the Firth of Forth in Scotland. It is Scotland’s only refinery.
The site will become an import and distribution terminal for finished fuels, which will cut the number of employees at the site from 475 to around 75 over the next two years.
According to PRL, the proposed refinery closure and transition plan directly results from a collision of global market pressures and the global energy transition, the combination of which has left the 1924-built refinery unable to economically compete with more modern and efficient sites in the Middle East, Asia Pacific, and Africa, as well as limited demand for key fossil-based fuels produced at the site.
It said the plant is currently losing around US$500,000 per day, and expects to see a US$200 million loss for 2024.
In response to PRL’s confirmation of its decision to proceed with the site’s transformation plan, Ineos said it is “business as usual” for its other operations around the Grangemouth site, namely the Ineos Olefins and Polymers petrochemical plant and the FPS.
Meanwhile, PRL said it has also simultaneously been working with the UK and Scottish governments to evaluate options for Grangemouth to become a low-carbon fuels manufacturing hub.
The operator confirmed it has undertaken an initial feasibility study for the proposed Project Willow project to assess various low-carbon opportunities from technical, economic, commercial, regulatory, environment, community and skills perspectives.
Funded equally by the Scottish and UK governments, the feasibility study is being managed by Ernst & Young Global Ltd. with technical, engineering, and commercial support provided by Petroineos, Ineos, and PetroChina, PRL said.
With the initial research phase already completed—including shortlisted options for potential manufacturing of sustainable aviation fuel (SAF), low-carbon hydrogen, eFuels, and other possible low-carbon products—the project team has now entered the second phase of research that consists of a detailed assessment for viability of each shortlisted option, according to PRL.
By 2025, the company said it expects the project team to have identified commercially viable opportunities to develop low-carbon fuels at the former refinery that—in addition to underpinning government commitments to a net zero transition—would maximise local employment and contribute to long-term sustainable energy and fuel security in Scotland and the UK.
