TimelineINEOS Grangemouth petchems, refinery closure/re-opening

25 October 2013 16:39  [Source: ICIS news]

LONDON (ICIS)--Here is a timeline highlighting the main developments of the closure/re-opening of INEOS’s Grangemouth petrochemicals and refinery complex between 13 September and 25 October.

13 September - Unite workers announce workers at Petroineos' 210,000 bbl/day Grangemouth refinery will vote on industrial action after the trade union sent out ballots. Unite attribute the vote to a decision made by INEOS Petrochemicals UK, a subsidiary of Switzerland-headquartered INEOS, to place Stephen Deans, a trade union representative and member of the local Falkirk Constituency Labour party (CLP), under investigation.

19 September - INEOS confirms it will close its Grangemouth petrochemical plant by 2017 unless it can stop the facility from losing money and obtain the necessary investment to secure shale gas feedstock supply. INEOS says it is disappointed with Unite's decision to ballot its members at Grangemouth and would not be intimidated by the union’s actions. INEOS adds the business continues to struggle and, with heavy cash losses, industrial action was neither wise nor sensible.

23 September - INEOS says it would be keen to upgrade the infrastructure at the Grangemouth site to allow the import of US shale-derived ethane, but the facility is insufficiently competitive to justify the investment at present.

27 September - Unite workers at Petroineos' refinery in Grangemouth vote in favour of industrial action. INEOS Petrochemicals UK expresses its disappointment at news of the outcome of the employee vote, stating any industrial action could lead to closures and job losses at the site. Unite accuses the company of “playing Russian roulette” with the Grangemouth site.

30 September - INEOS launches a survival plan to ensure the long-term future of its loss-making Grangemouth refining and petrochemicals site partly by switching to ethane feedstock imported from the US. The plan also requires workers to accept pension changes, government grants, plant closures and job losses. The company indicates it is willing to invest £300m to facilitate the development of a new gas terminal to bring in ethane from the US, making Grangemouth the beneficiary of a scheme identical to the one the company is currently executing in Rafnes, Norway.

4 October - INEOS announces it has been forced to write down the value of its Grangemouth petrochemical assets to “nil value” because of repeated annual losses. The company says it has written down the value of all of the petrochemical assets at the site, including property, plant and equipment, from £400m to zero.

09 October - INEOS says there is currently no set end date for the industrial action taking place at the Grangemouth refinery. Workers at the site had been operating under an overtime ban and a work to rule since 7 October after workers voted in favour of industrial action.

11 October - Unite says employees at the Grangemouth refinery are to strike for 48 hours later in the month. The union serves notice to INEOS that employees at the refinery will strike on 20 October until 07:00 GMT on 22 October. Unite claims that over the last two days INEOS has declined to enter into mediation talks with industrial dispute resolution body Acas, and refused an offer for an independent Unite-funded financial survey of the site.

11 October - UK energy secretary Edward Davey urges Unite to call off the planned strike.

14 October - INEOS says it is set to begin talks with Unite in a bid to avert an upcoming walkout at its Grangemouth UK site.

INEOS said financial data released by its auditors relating to the performance of the Grangemouth complex confirms its claims the site has lost £579m in the last four years. The company says it had asked PricewaterhouseCoopers, its auditor, to confirm the claim after the figure was questioned by politicians and union figures.

15 October - INEOS says it is “disappointed” at the lack of progress in its talks with trade union Unite following initiation of formal mediated talks regarding the upcoming shutdown of its Grangemouth, UK petrochemicals and refinery operations due to an employee walkout.

The company announces it has started to take down production units to a cold standby in anticipation of a full shutdown on 20 October, prompted by a 48-hour employee walkout.

16 October - Unite says the strike at INEOS’ Grangemouth site has been called off. The strike has been cancelled “to protect national assets” following the breakdown of negotiations between the two parties, Unite said.

INEOS says the oil refinery and petrochemicals complex will remain closed until 22 October while employees consider its reform proposals regarding the future of the complex.

18 October – INEOS announces its Grangemouth petrochemicals and refining facility could restart if employees agree to a guarantee of no strikes during the 60 day consultation period on the survival of the complex.

21 October - More than half of the union employees of the Grangemouth petrochemicals and refinery facility reject a proposal from INEOS on pay and pension terms.

22 October - The deadline for employees at Grangemouth to vote on proposals that INEOS claims are necessary for the plant's future expires. Employees had until the evening of 21 October to submit their votes on a survival plan drawn up by INEOS, which included alterations to current employee pension arrangements and the need to secure investment to develop a new terminal for US-derived shale gas at the site.

23 October – INEOS confirms the Grangemouth petrochemicals complex is to remain closed. The company tells employees in the morning the site will remain offline after being shut down early last week in preparation for anticipated industrial action. Liquidators will be appointed within a week, the company adds. Petroineos, the INEOS/PetroChina joint venture that co-owns the Grangemouth oil refinery, will now decide whether to restart the facility.

Unite describes the decision by INEOS to close its petrochemicals complex in Grangemouth, as “catastrophic”, and “tantamount to economic and industrial vandalism”. Pat Rafferty, Unite Scottish secretary says: "Unite and our members at Grangemouth are devastated by the announcement this morning of the closure of the petrochemical plant.  It has confirmed our fears that this was the intention of INEOS all along."

The UK government still hopes to find a way for production to continue at the Grangemouth, petrochemicals plant. Energy Minister Edward Davey says: “We want this petrochemicals plant to stay open if at all possible.”

24 October - Unite confirms it has re-entered talks INEOS in a last-ditch bid to save jobs at the shuttered petrochemicals complex in Grangemouth.

Unite says it will agree to the survival plan laid out by INEOS to increase the competitiveness of the Grangemouth refinery and petrochemicals complex. A Unite spokesman says the union would “fully embrace” the survival plan – which includes wage, pension and union representation reforms at the site – and is awaiting a response from INEOS.

25 October – INEOS announces its Grangemouth petrochemicals complex is set to reopen after trade body Unite agreed to the producer’s survival plan for the facility. The union agrees to a raft of pension, wage and industrial action changes for workers at Grangemouth, as well as a reform of union representation at the site, in exchange for INEOS agreeing to bring the plant back online.

By: Franco Capaldo
+44 (0)20 8652 3214

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