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Chemical giant Ineos has won £600 million from the UK government for a plant in Belgium, despite plans to close Scotland’s only oil refinery.
The company, owned by Jim Ratcliffe, a billionaire tax exile and Manchester United shareholder, announced plans last year to dismantle Grangemouth’s production capacity and turn it into an import depot.
Ineos operates the site under a joint venture with the Chinese government called Petroineos, but has claimed the refinery is not viable despite making a profit of £107 million last year.
Thousands of jobs could be lost and the closure would have serious repercussions for the UK’s energy security, leaving Scotland as the world’s top oil producer without refining capacity.
And we can reveal that the UK government has failed to take steps to secure the future of the huge factory near Falkirk, while also offering a £600 million loan guarantee to Ineos for a chemical plant in Antwerp, Belgium.
East Lothian MP Kenny MacAskill said: “The Grangemouth oil refinery is not only profitable, but also profitable for our energy security at a time when global tensions are rising.
“Ships are being attacked in the Red Sea, the UK is bombing Houthi sites in Yemen and relations with Russia couldn’t be worse, which has had a massive impact on energy costs in the UK.
“Despite all this, Rishi Sunak is incredibly fed up with Scotland’s last single refinery, while also offering money to Ineos to expand a plastics plant in Belgium.
“The undeniable fact is that you can’t have energy security from producing fine oil abroad. Grangemouth provides energy security to this energy and that is why decisive investments and actions are needed now to secure its future.
“The UK Treasury is reaping benefits from North Sea oil and fuel at the rate of billions in tax gains and some of that wishes to be reinvested now. “
Ratcliffe is one of the richest men in Britain, with a fortune estimated at around £30 billion. It controls between 50 and 75 percent of Ineos, which has an annual turnover of more than £50 billion. In addition to his chemical empire, he bought a 27. 7 percent stake in Manchester United earlier this year.
In September 2020, Ratcliffe officially replaced his tax from Hampshire to Monaco, a move that would save him £4 billion in taxes.
The Chinese government bought its 50-stake in Grangemouth in 2011.
The UK is offering a £600 million guarantee to Ineos to build Europe’s largest petrochemical plant over 30 years.
The huge Antwerp plant will massively increase plastic production in Europe and it is argued that this progression will create jobs in production in the UK.
Financial pledges for Project One were made through the UK government’s Export Finance Department, a branch of the Department for Trade and Business. Meanwhile, in Scotland, Ratcliffe and the Chinese government looked like the fate of Grangemouth with little intervention from the Scottish or British governments. .
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This comes after Defence Secretary Grant Shapps recently said that “energy security is national security” following Russia’s invasion of Ukraine, whose fuel and electricity costs are set to skyrocket.
Labour MP Richard Leonard warned of the national security implications of the refinery completion.
He said: “I need to extend the life of Grangemouth. La plant is profitable and a fraction of the profits from North Sea oil would secure its future. The UK and Scottish governments deserve to do much more to protect this key national business asset. .
“If the refinery is allowed to close, Scotland will become the only primary oil producing country without it and will put us alongside emerging countries such as the Republic of Congo and Trinidad and Tobago, which produce less oil than Scotland. It’s not fair that Westminster is offering millions of dollars to help Ineos open a factory in Belgium, when it turns out that little is being done to ensure there are thousands of high-quality jobs in Grangemouth.
“As things stand, we have a billionaire in Jim Ratcliffe and a foreign government in China that completely controls this critical part of the national infrastructure.
“Haven’t we learned in recent years the importance of energy security?Petroineos Manufacturing Scotland made a record profit of more than £107 million last year, following a loss of £50 million in the latest reporting period.
Plans to shut down the refinery were revealed in November, with resources saying it was “not economically” viable to save it.
Staff have reportedly been told that Scotland “simply wouldn’t be big enough for a fuel refinery” due to falling demand as the use of renewables increases. British and Scottish ministers have given no hope of intervening even though North Sea revenues are expected to rise. £17. 25 billion over the next two years.
It has been estimated that it would take between £60 and £80 million to restart a ‘hydrocracking’ unit at Grangemouth.
The main products of hydrocracking are jet fuel and diesel, although liquefied petroleum fuel can also be produced.
Experts said the charge of repairing the Grangemouth unit, which was taken out of service in April last year and has not returned to operation since, played a key role in its planned closure.
A UK government spokesperson said: “UK Export Finance has provided a monetary guarantee to Petroineos to help it win a contract that has nothing to do with the operation of its Grangemouth refinery.
“We understand that this is a time of concern for refinery workers and we are in contact with the Scottish Government and the company to secure the future of the site. “
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