It is not known exactly when the Grangemouth oil refinery will close but its transition to a fuel import terminal will continue until at least spring 2025, MSPs have heard.
The company which owns Scotland’s only refinery said the site is “highly inefficient” and macroeconomic conditions mean it cannot continue operating at a loss.
Iain Hardie, head of external affairs at owners Petroineos, spoke to Holyrood’s Economy Committee on Wednesday.
The company is a joint venture between PetroChina and Ineos.
He confirmed that of the refinery’s 500 current jobs, only around 100 would be retained when it becomes an import terminal.
Christopher Furlong via Getty ImagesOther parts of the wider complex at Grangemouth – such as the Forties pipeline system which brings in North Sea oil and gas – will continue, he said.
Mr Hardie said: “We will operate through to at least 2025.”
He said the company’s announcement was for the start of the transition rather than the closure of the refinery, with Mr Hardie saying “we don’t know when this will be”.
Grangemouth is “one of the oldest (refineries) in Europe and highly inefficient”, he said.
Mr Hardie said domestic demand for fuels is falling away due to increased use of electric vehicles and hybrids.
The sharp increase in oil and gas prices due to the war in Ukraine has not changed the fundamental outlook for the facility, he said.
Over the last decade, the refinery had incurred losses of more than 1 billion US dollars (£800 million), the committee was told.
Committee convener Claire Baker expressed surprise at how quickly the closure had been announced, saying she and her fellow MSPs had visited the site earlier this year.
Baker said: “From the outside, this doesn’t look like a just transition for Grangemouth.”
Wellbeing economy secretary Neil Gray spoke to the committee later on Wednesday morning.
He said a just transition plan for Grangemouth would be published by spring next year.
The GMB trade union has said news of the plant’s closure is “deeply worrying”.
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