October 23, 2013 / 7:09 AM / 4 years ago

Scottish government looks for Grangemouth buyers

A placard floats in a puddle in a car park in front of the Grangemouth refinery in Scotland October 21, 2013. REUTERS/Russell Cheyne

LONDON (Reuters) - The Scottish government has been talking to potential buyers for the troubled Grangemouth refinery and petrochemical plant in Scotland, further raising the stakes in a bitter dispute between owner Ineos and the workforce that may see the plant close.

“In view of the clear danger of a stalemate developing between the owners and the union, the Scottish Government has been actively pursuing alternative options,” John Swinney, Scotland’s finance secretary said in a statement.

Industry observers said suitable buyers for the refinery were likely to emerge were it to go on the market.

“It’s a sound asset that’s got a lot going for it. It serves the whole of Scotland, Northern Ireland and much of Northern England and it has the crude supply stream from the North Sea on its doorstep,” said Stephen George, analyst at KBC.

The move comes as fears grow about the future of the plant that employs around 1,400 people. Operator Ineos will tell workers at 0900 GMT on Wednesday if the Grangemouth oil refinery in Scotland will close down permanently, it said in a statement.

The Swiss-based company said it was presenting a decision to shareholders in the plant on Tuesday. The 210,000 barrels per day refinery has been shut for about a week due to a bitter industrial dispute.

The refinery moved closer to permanent closure after a clear majority of union workers on Monday rejected a pensions and benefits offer.

“Ineos is now considering the numbers of employees that have given their support to its survival plan,” the company said.

“Results will be presented to a meeting of its shareholders. The company will first communicate the shareholders views to the workforce directly on Wednesday.”

The union said it wanted a negotiated settlement, rather than one that was imposed on workers.

Chinese oil giant PetroChina owns half of the refinery, which Ineos operates. Ineos owns completely the attached petrochemical plant.

Grangemouth also powers BP’s Kinneil terminal, which processes North Sea crude coming ashore via the Forties Pipeline System, a grade which helps set the benchmark for global oil prices.

The refinery could be the latest casualty of competition from the newest generation of major refineries in Asia and the Middle East, and falling demand for gasoline in Europe.

If it closes Grangemouth could be the second UK refinery to shut down in the space of two years following the demise of the Coryton plant east of London in 2012.

Reporting by Simon Falush; editing by William Hardy and Keiron Henderson

Our Standards:The Thomson Reuters Trust Principles.
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