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Petroineos looks to mothball nearly half of Grangemouth oil refinery

·1-min read

LONDON (Reuters) - Petroineos plans to mothball nearly half of its 200,000 barrel-per-day refinery at Grangemouth in Scotland, the latest plant to scale back operations due to a coronavirus-related drop in demand and a weak long-term outlook for oil consumption.

The company plans to shut down its 65,000 bpd crude distillation unit (CDU) 1 as well as the 25,000 bpd fluidised catalytic cracker unit, used to produce gasoline, the company said on Tuesday.

It said the proposal, which workers union Unite Scotland said meant a potential loss of 200 jobs, had been put forward to its employees. The two units were already closed due to the COVID-19 pandemic that has cut fuel demand, it added.

Unite said it has asked the company to use the five-month extension of the British government's furlough scheme to provide time to find an alternative.

Petroineos is a joint venture between Chinese state oil firm PetroChina <601857.SS> and privately owned British chemical producer INEOS.

The announcement is the latest in a string of refinery capacity reductions or closures as restrictions to curb the spread of the coronavirus continue to hit global fuel demand.

(Reporting by Ron Bousso; Writing by Julia Payne; Editing by Jan Harvey and Emelia Sithole-Matarise)