Grangemouth owner turns down new buyout offer

The refinery is set to close next year

The owner of Grangemouth oil refinery has turned down a further bid to buy out the industrial site ahead of its proposed closure next year.

A consortium, including an energy investor based in the United States, has approached Petroineos and the Scottish government.

The proposed takeover was deemed "not credible", without the necessary capital to invest while sustaining continued losses.

More than 400 jobs are expected to go at the site. Petroineos has plans to turn it into an fuel import terminal, with possible investment in a biofuels refinery or hydrogen plant.

This was the second approach by the consortium. Another potential bidder has also been turned away on the same grounds.

In September, The Times newspaper reported that Canadian businessman Garth Reid was engaged in talks with Petroineos.

It said there had been "concerns" about the viability of that approach.

The Unite union has written to UK Energy Secretary Ed Milliband demanding action to be taken over Grangemouth.

General Secretary Sharon Graham said: "A Labour government not putting together a serious plan for the future of the site and the thousands of jobs which depend on it would be a huge dereliction of duty.

"How this government deals with the threatened closure at Grangemouth will be the key test of your commitment to a just transition for workers and communities, and to our future energy security."

Unite says it has produced a detailed plan which demonstrates how Grangemouth can be initially converted into a Sustainable Aviation Fuel facility, before further developing into a full bio-fuels outlet.

It also highlights serious concerns about Petroineos’ lack of transparency and a lack of evidence from the company about the need to close the refinery.

A Petroineos spokesman said: "Since the Petroineos joint venture was formed 13 years ago, our shareholders have invested nearly £1bn in the refinery, only to absorb losses of £600m.

"Last week, the refinery lost £385,000 on average each day and we expect to lose more than £150m in total during the course of this year.

"We have not received any credible or viable bids for the refinery."