Frank Demay, the chief executive of Petroineos, the joint venture between PetroChina and Sir Jim’s Ineos which runs the refinery, said the site would become an import terminal, bringing fuels refined abroad into the UK. He said lower demand for fuel in future, triggered by the ban on new petrol cars from 2035, was partly to blame.
He said: “The energy transition is happening … That reality, aligned with the cost of maintaining a refinery built half a century ago, means we are exploring ways to adapt our business.
“The action we are taking to create an import terminal will safeguard fuel supply for Scotland. We expect Grangemouth to be ready to operate as a national distribution hub for finished fuels in the second quarter of next year.”
The announcement will be highly controversial in Scotland, where Grangemouth is seen as a cornerstone of the nation’s remaining heavy industry.
Scottish politicians and the Government have been conflicted over Grangemouth’s fate – on the one hand wanting to protect jobs and please the unions but also wanting to move the country away from its reliance on oil and gas.
Mr Miliband said: “It is deeply disappointing that Petroineos have confirmed their previous decision to close Grangemouth oil refinery.
“We will stand with the workforce in these difficult times, that is why we are announcing a package of investment to help the workforce find good, alternative jobs, invest in the community and serve a viable industrial future for the Grangemouth site.”
Ms Martin said: “We have communicated our disappointment to Petroineos today. The Scottish Government has consistently made clear our preference was for refining to continue as long as possible and we have continued to press the shareholders for a positive decision until the 11th hour.”