Scotland’s only crude oil processing facility, the Grangemouth refinery, will close in the second quarter of 2025, its owners confirmed on Thursday. The refinery has struggled to compete with new, more advanced facilities in regions like Asia, Africa, and the Middle East.
The Grangemouth refinery was originally opened in 1924 by BP’s predecessor and expanded into petrochemical production in the 1950s. Despite its daily refining capacity of 150,000 barrels, the facility has faced increasing pressure from large refineries built by major oil companies in Asia and the Middle East, which have benefited from newer technologies and economies of scale.
Petroineos, the joint venture between PetroChina and INEOS that owns the refinery, announced on Thursday that it plans to cease refining operations at Grangemouth and transform the site into a fuel import terminal and distribution hub by mid-2025. This transition is subject to consultation with employees.
However, INEOS assured that other operations at Grangemouth, such as INEOS O&P UK and the Forties Pipeline System (FPS), will continue without disruption. These businesses will remain unaffected by the changes, continuing to provide high-quality products and services to their customers.
The closure of the refinery will result in the loss of 400 jobs. The workforce at the site will be reduced from 475 to just 75 employees. The fuel import terminal, which will replace the refinery, will require fewer than 100 workers, according to the company.
In recent years, several major oil companies, including Shell and Eni, have also begun converting refineries in Europe to meet the growing demand for base oils and biofuels.
In January 2024, Italy’s Eni announced plans to convert its refinery in Livorno into a biofuels production facility. This followed Shell’s decision to transform its refinery at the Wesseling site in Germany into a base oil production unit.
The shift reflects a broader trend in the oil industry as companies adapt to changing market demands and global competition.