Grangemouth Refinery

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Grangemouth Refinery
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Overview of the Ethylene Plant.
Scotland relief location map.jpg
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Location of the Grangemouth Refinery in Scotland
CountryScotland
City Firth of Forth, Grangemouth
Coordinates 56°01′05″N3°41′53″W / 56.018°N 3.698°W / 56.018; -3.698
Refinery details
Operator Petroineos
Owner(s) Ineos
PetroChina
Commissioned1924 (1924)
Area700 hectares (1,700 acres)
Capacity140,000 bbl/d (22,000 m3/d)
No. of employees500 (2023)
Refining units10
No. of oil tanks200+

Grangemouth Refinery is an oil refinery complex located on the Firth of Forth in Grangemouth, Scotland, currently operated by Petroineos.

Contents

It is the only operating crude oil refinery in Scotland (following the cessation in 2014 of Bitumen refining activities at the Nynas Dundee Refinery [1] ), and currently one of the six remaining UK Refineries.

It is reputedly the UK's second-oldest, supplying refined products to customers in Scotland, northern England and Northern Ireland, as well as occasionally further afield.

History

Choice of Location

Grangemouth Refinery commenced operation in 1924 as Scottish Oils. Its location at Grangemouth was selected due to the adjacent Grangemouth Docks which supported the import by ship of Middle East crude oils for feedstock, plus the cheap availability of large areas of reclaimed flat land. Another important factor was the abundant availability of skilled labour in shale oil refining: the first oil works in the world, 'Young's Paraffin Light and Mineral Oil Company Limited', had opened in 1851 at Boghead near Bathgate, to produce oil from shale or coal using the process patented in 1850 by Glasgow scientist Dr James Young (known as "Paraffin" Young), for "treating bituminous coals to obtain paraffine therefrom".

With the world's first oil wells coming on-line in 1854 in Poland, the global price of oil dropped and many Scottish shale oil works became un-economical and had to either close or concentrate production on other materials. By 1910 only five major Scottish shale oil companies remained, fighting to remain competitive against cheaper imported American oil. During the First World War the British government helped to develop new fields in Arabia to provide cheap oil to sustain the war effort. This drove prices even lower to a point where the shale oil industry was unable to compete, and as a result in 1919 the six surviving companies (including Youngs) came together under the management of the newly formed Scottish Oils. That same year Scottish Oils was purchased by the Anglo-Persian Oil Company, a forerunner of the British Petroleum Company (later known as BP)

Simple Refinery: 1924-1939

The Refinery operated from 1924 to 1939 at a throughput of 360,000 tonnes per year. It was then forced to shut down between 1939 and 1946 by World War II and the resulting drying up of crude feedstock imports. When operations recommenced in 1946, the refinery underwent a number of major expansion programmes.

Petrochemical complex: 1946-1975

In the 1940s the Distiller's Company Ltd were investigating synthetic processes for the production of alcohol, to replace the traditional fermentation process using molasses and so resolve issues with unreliability of supply and the associated cost fluctuations. This business need combined with BP's interest in petrochemical development resulted in 1947 in the formation of a joint company, British Hydrocarbon Chemicals Ltd. The new company located its site adjacent the existing BP Grangemouth Refinery, utilising available feedstock from the refinery byproduct streams. This petrochemical plant was commissioned in 1951, the first in Europe.

In the 1950s the refinery was connected to the Finnart Oil Terminal at Loch Long on the west coast of Scotland by a 58-mile (93 km) pipeline, to allow the import of crudes via deep-water jetty, which supported the use of larger oil tankers. The first crude oil import from Finnart was in 1952.

Later on, in the 1990s, a second line was also installed, to allow the direct supply of finished refinery products to the Finnart terminal, primarily for export to markets in Northern Ireland and the Irish Republic.

In the 1960s, a pilot "proteins-from-oil" production facility was built at the refinery. It used BP's technology for feeding n-paraffins to yeast, in order to produce single cell protein for poultry and cattle feed. [2]

BP's operations at Grangemouth grew over the next twenty years to meet the growing demands for both petrochemicals and fuels.

North Sea Oil: 1975-2004

In 1975 the discovery of North Sea Oil brought the commissioning of the Kinneil Crude Oil Stabilisation terminal, which connected directly into the INEOS Forties pipeline system; this plant serves to stabilise Forties Crude oil for either export to third parties or feeding into the refinery, and allowed the processing of North Sea oil as part of the refinery crude 'slate' of feedstocks.

Post-BP Period: 2004-2023

In 2004 BP decided to divest its worldwide olefins and derivatives business: the sale included the Refinery and connected petrochemicals complex (excluding the Kinneil terminal and Forties Pipeline System, which BP retained until FPS was sold to Ineos in 2017).

In 2005 the new company created to run this business was named Innovene, which later that same year was purchased by Ineos, the largest privately owned chemicals company based in the UK. [3]

Ineos Refining, which included both the Grangemouth and Lavéra (outside Marseilles, France) Refineries, in 2011 entered into a 50%/50% joint venture with the Chinese state oil company Petrochina, to form Petroineos.

In November 2020, Petroineos announced the mothballing of the oldest of the three Crude Oil Distillation Units, and its Fluid Catalytic Cracking Unit, both of which had been shut down since the start of the COVID-19 pandemic. This would also be accompanied by the loss of up to 200 jobs, or around 1/3 of the permanent workforce. [4]

Petroineos blamed this restructuring on the reduction in demand for road and jet fuels, a direct result of the pandemic, combined with a gradual long-term increase in the electrification of road vehicles, and a decreased reliance on fossil fuels. This would reduce the total Refinery throughput from 210,000 to 150,000 barrels per stream day. [5]

Conversion to Oil Terminal: 2023-Present

In November 2023, Petroineos announced that over the next 18 months the refinery would undergo a number of discrete projects to transform it from a manufacturing site into an oil terminal, for the import, storage and distribution of a range of Fuels. [6]

The business cited the infeasibility of continuing to operate as a profitable going concern, under the multiple pressures of over-capacity in the North-West Europe market, the ongoing demand destruction for road fuel from the electrification of road vehicles, compounded by the high cost of manufacturing in the UK.

Completion of the transformation would occur around 2025, with commencement of terminal operations between then and 2027. This would be accompanied by shutting down all of the Refinery operating Plants, plus a significant number of redundancies, and would also impact Finnart Oil Terminal and Kinneil. None of the other Ineos businesses at Grangemouth would be affected.

Operation

December 2011 Grangemouth7 December.jpg
December 2011

The Grangemouth Refinery is a major landmark, with its numerous gas flares and cooling towers visible across a wide area of the Scottish Lowlands.

Scenes from the 2013 film World War Z featuring Brad Pitt were filmed near the facility. [7] [8] [9]

The refinery has a 'nameplate' capacity for processing 140,000 barrels (22,000 m3) of crude oil daily. It currently employs about 500 permanent staff, and a further 350 contractors over a 700 hectare site.

It processed approximately 400,000 tonnes of imported crude oil annually until the end of the Second World War, and subsequent expansion programmes have increased refining capacity to in excess of 10 million tonnes per year. [10]

The INEOS-owned North Sea Forties pipeline system terminates at the Kinneil processing facility, and surplus crude is exported via pipeline to the Dalmeny tank farm, and subsequently shipped out from the Hound Point marine terminal onto oil tankers of up to 350,000 D.W.T. which are able to navigate the shallow water of the Forth.

Annual output share

Safety record

Refinery from the Bathgate Hills Grangemouthfrombathgateoct2016.jpg
Refinery from the Bathgate Hills

One of the refinery's biggest accidents happened at 7am on Sunday 22 March 1987 when the HydroCracker Unit exploded. The resulting vibrations and noise could be heard up to 30 km away. The resulting fire burned for most of the day. One worker was killed. [11] Just 9 days earlier on 13 March, another incident occurred involving the refinery flare line, the resulting fireball killed two workers. [12]

In 2002, BP the previous owners of the plant, were fined £1m for breaching safety laws during a series of incidents which occurred in 2000. [13]

Ineos went to court in April 2008 over claims that it had polluted the River Forth in mid-2007. [14]

Ineos industrial disputes

In 2008, Ineos proposed that plant workers start contributing a share towards their own pensions (a final salary pension scheme [15] ), instead of the existing non-contributory fixed salary pensions. The request would have obliged future new entry employees to pay 6% of their salary, phased in over a six-year period. 97% of the Unite trade union's 1,250 members at Grangemouth voted in favour of strike action. David Watt, of the Institute of Directors in Scotland, stated that the average Grangemouth Refinery plant worker earns £40,000 per year (nearly twice the Scottish average.) [16] This was disputed by the Deputy General Secretary of the Scottish Trades Union Congress, Dave Moxham, who stated that they earn £30,000 per year. [15]

The strike began on 27 April 2008, and lasted until 29 April. [17] The petrol supply of Scotland was affected by the strike, as panic buying led some petrol stations across the country to run dry. [18] The Retail Motor Industry Federation stated that there was a stock of fuel that could last 70 days, easily covering the lapse in production so long as no panic buying occurred. [19] With the shutdown of the plant, BP closed the Forties pipeline system as their Kinneil terminal relies on power from the Grangemouth refinery. [20] With the shutdown of Kinneil, 70 North Sea oil platforms were forced to shut down or reduce production, at the cost of 700,000 barrels per day (110,000 m3/d). [20] Shutting the pipeline down reduced Britain's petroleum supply (the Forties pipeline provides 30% of the UK's North Sea oil), and cost the UK economy £50 million in lost production every day it remained closed. [21]

There was further industrial action in 2013. Ineos stated that the plant was making losses, and offered a survival plan requiring employees to accept worse employment terms, particularly on pensions, which the employees rejected. [22] [23] Ineos stated in October 2013 that the petrochemical works would close. [24] [25] Following negotiations led by Scottish Finance Secretary John Swinney and Scottish Secretary Alistair Carmichael, on 24 October the unions accepted a survival plan put forward from the management of the plant. [26] On 25 October 2013, it was announced the plant will stay open and Unite had agreed to taking no strike action for three years, moving to a new pension scheme and accepting a three-year pay freeze. [27]

Panorama of Grangemouth petrochemical works, November 2006 Grangemouth.jpg
Panorama of Grangemouth petrochemical works, November 2006

See also

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References

  1. ↑ "Dundee Refinery - Nynas". Archived from the original on 2 November 2013. Retrieved 15 September 2013.
  2. ↑ Bamberg, J. H. (2000). British Petroleum and global oil, 1950-1975: the challenge of nationalism. Volume 3 of British Petroleum and Global Oil 1950-1975: The Challenge of Nationalism, J. H. Bamberg British Petroleum series. Cambridge University Press. pp. 426–428. ISBN   0-521-78515-4.
  3. ↑ "INEOS completes purchase of BP's Innovene business for $9bn". ineos.com. 16 December 2005.
  4. ↑ "Union brands Petroineos' Grangemouth job cut proposals 'premature'". falkirkherald.co.uk. 10 November 2020.
  5. ↑ Sheppard, David (10 November 2020). "Petroineos to cut capacity of Scotland's sole oil refinery". Financial Times .
  6. ↑ Williams, Martin (22 November 2023). "Grangemouth: Jobs at risk as Sir Jim Ratcliffe-backed refinery to shut". The Herald .
  7. ↑ "World War Z". movie-locations.com.
  8. ↑ "Grangemouth features in Hollywood trailer". falkirkherald.co.uk.
  9. ↑ "Zombie fever heads east as Pitt hits Grangemouth". heraldscotland.com.
  10. ↑ UKPIA - Overview of Grangemouth Facility Archived 2008-04-25 at the Wayback Machine
  11. ↑ http://www.hse.gov.uk/comah/sragtech/casebpgrang87b.htm The Hydrocracker Explosion and Fire at BP Oil, Grangemouth Refinery. 22 March 1987
  12. ↑ https://www.icheme.org/communities/special-interest-groups/safety%20and%20loss%20prevention/resources/~/media/Documents/Subject%20Groups/Safety_Loss_Prevention/HSE%20Accident%20Reports/The%20Fires%20and%20Explosion%20at%20BP%20Oil%20Grangemouth%20Refinery%20Ltd.pdf [ dead link ]
  13. ↑ "BP fined £1m for safety offences". BBC News . 18 January 2002. Retrieved 4 May 2010.
  14. ↑ "Court action for refinery bosses". BBC News. 22 April 2008. Retrieved 4 May 2010.
  15. 1 2 "Workers left with no alternative". BBC News. 23 April 2008. Retrieved 4 May 2010.
  16. ↑ "'Be realistic' call to petrol workers". BBC News. 22 April 2008. Retrieved 4 May 2010.
  17. ↑ "Deal could end refinery dispute". BBC News. 29 April 2008. Retrieved 4 May 2010.
  18. ↑ "The petrol picture in Scotland". BBC News. 25 April 2008. Retrieved 4 May 2010.
  19. ↑ "Q&A: The Grangemouth dispute". BBC News. 28 April 2008. Retrieved 4 May 2010.
  20. 1 2 "Opec warns oil could reach $200". BBC News. 28 April 2008. Retrieved 4 May 2010.
  21. ↑ "'Weeks' to re-start strike plant". BBC News. 26 April 2008. Retrieved 4 May 2010.
  22. ↑ Anthony Clark (17 October 2013). "Unite accuses Ineos of 'fancy accounting' over Grangemouth". Plastics & Rubber Weekly. Retrieved 25 October 2013.
  23. ↑ Douglas Fraser (18 October 2013). "Shedding light on Grangemouth". BBC. Retrieved 25 October 2013.
  24. ↑ "Grangemouth dispute: Ineos says petrochemical plant will close". BBC News. 23 October 2013. Retrieved 23 October 2013.
  25. ↑ "Grangemouth plant shutdown leaves government fighting to save 800 jobs". The Guardian. 23 October 2013. Retrieved 23 October 2013.
  26. ↑ "Grangemouth dispute: Hopes rise after Unite accepts survival plan". BBC News. 24 October 2013. Retrieved 24 October 2013.
  27. ↑ "Grangemouth dispute: Ineos says plant will stay open". BBC News. 25 October 2013. Retrieved 25 October 2013.
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