**Historic UK Refinery to Shut Down: Petroineos Announces Permanence of Closure**
In a significant move for the UK’s energy landscape, Petroineos has broadly confirmed that Petroineos Manufacturing Scotland Ltd., the long-standing operator of the Grangemouth refinery in Scotland, will cease operations by the second quarter of 2025. This decision directly stems from a combination of global market pressures and the evolving global energy transition. The 150,000-b/d facility, built in 1924, has been struggling to meet rising costs and decreasing demand for its traditional products amidst growing competition from more efficient facilities in the Middle East, Asia Pacific, and Africa.
The impending transition from a functioning refinery to a finished fuels import terminal and distribution hub is part of a broader strategy by Petroineos Refining Ltd. (PRL) to maintain fuel supply security for Scotland. Despite the closure, PRL emphasizes its commitment to creating new jobs and driving sustainable energy initiatives in the region.
Frank Demay, PRL’s Chief Executive Officer, underscored, “The action we are taking to create an import terminal will safeguard fuel supply for Scotland.” The transition phase is expected to begin in second-quarter 2025, with PRL anticipating the site to operate as a national distribution hub for finished fuels by that time.
**Background and Financial Constraints**
Petroineos has faced substantial financial strain in recent years, with annual maintenance and repair costs consistently outpacing earnings. Furthermore, the probable ban on new gasoline and diesel vehicles scheduled for the coming years will further reduce demand for conventional products.
This situation mirrors the industry’s broader challenge. During the global pandemic outbreak, PRL had already rationalized processing capacity at the site to mitigate financial burdens (OGJ Online, Nov. 19, 2020).
**INEOS’s Stance and Future Plans**
In response to PRL’s decision, INEOS Group’s parent company declared that their separate businesses at Grangemouth—specific