Angus MacDonald welcomes Grangemouth refinery deal between Ineos and Petrochina
Monday, 10 January 2011 22:02
Grangemouth SNP Councillor Angus MacDonald, SNP Candidate for Falkirk East has welcomed the news that Ineos has concluded a framework agreement with Chinese energy giant PetroChina which will see significant investment in the Grangemouth refinery. The deal, which is an equal partnership between Ineos and PetroChina will result in long-term growth at the plant, enhance long-term profitability and ensure 2,000 jobs are secure.
Welcoming the announcement Cllr Angus MacDonald said:
“Having just attended a meeting with Ineos management this evening to discuss the implications of the deal it is clear that this multi-billion pound joint venture will be of enormous long-term benefit to Grangemouth and Scotland, resulting in significant investment and long-term growth and sustainability at the plant.
"This deal, which is a joint venture, not a complete buyout, has been on the cards for over a year and a half, with industry insiders speculating regularly that a deal was imminent. It is estimated by industry insiders that the deal is worth between US$6 and US$7 billion. Significant investment is required to the refinery's infrastructure and PetroChina's investment will secure 2,000 jobs and will help to ensure the plant is upgraded.
“While the investment from China may be of concern to some we have to be realistic and accept that we live in a global economy and foreign investment has to be welcomed as we pull ourselves out of Labour's recession. It is worth stressing that the intake of North Sea oil and the pipeline network will still be under the control of BP Exploration in Grangemouth, who will sell oil for processing to the Ineos/PetroChina refinery.”
INEOS and China National Petroleum Corporation (CNPC) also announced a new strategic co-operation agreement to share refining and petrochemical technology.
Calum MacLean, INEOS Refining CEO, says: “These agreements will help secure the long term future of jobs and skills at Grangemouth and Lavéra in France, in partnership with one of the world’s largest energy companies.”
Si Bingjun, General Manager of PetroChina International London, says: “The proposal is consistent with our strategy of building a broader business platform in Europe and of becoming a leading international energy company.”
Scottish Government Finance Secretary John Swinney also welcomed the deal which will enhance the long term profitability of the Grangemouth oil refinery and secure more than 2,000 Scottish jobs.
Mr Swinney said:
"Scotland has unrivalled energy resources and expertise, and the Scottish Government is committed to working with China across this sector.
“The Grangemouth Refinery is a strategic asset for Scotland and this announcement represents good news for Scotland and Scottish jobs.
“The announcement today of a Joint Venture between China’s premier oil company, PetroChina and INEOS helps to enhance the profitability of refineries here and in France.
“This Joint Venture enhances security of supply for customers and retains the jobs and skills that have been built up over many years at Grangemouth. It further embeds the successful relationship and excellent links that INEOS has with the local and Scottish communities.
“This agreement provides further evidence of the strengthening of ties between Scotland and China. It coincides with a state visit by Chinese Vice Premier Li Keqiang and the conclusion yesterday of a £6.4 million licensing deal between Scottish and Sino-Scottish companies on green energy development.”
All companies will work towards the formation of the proposed joint ventures by the end of June 2011.
The deals will create a true strategic partnership between the two companies. They will improve the long-term sustainability of the INEOS refineries, enhance security of supply for customers and secure jobs and skills in both the UK and France.
If the deals are completed successfully, they will be of great importance for PetroChina’s global allocation of resources and market portfolio, exploring the high-end European market, as well as establishing PetroChina’s European oil and gas operation centre.
Both sites are integrated into INEOS’s downstream petrochemical production and remain strategic to its long-term business.
Subsequent to the signing of the framework agreement, which defines the principles under which INEOS and PetroChina International will work towards forming the joint ventures, related to refining and trading, there will be a period of consultation prior to signing a binding agreement, subject to the approval of related regulatory bodies.
INEOS is the world's third largest chemicals group and a leading manufacturer of petrochemicals, speciality chemicals and oil products. INEOS employs 15,000 people and annual sales of around $40bn.
INEOS Refining is Europe's leading independent crude oil refiner. It processes more than 410,000 barrels of crude oil per day, to produce in the region of 19 million tonnes of fuels per annum. Refineries are located at Grangemouth and Lavéra France.
The Grangemouth refinery on the Firth of Forth has direct access to crude oil and gas from the North Sea. It processes around 200,000 barrels of crude oil per day (equivalent to 9 million litres of clean fuels per day) and provides fuel to Scotland, Northern England and Northern Ireland.