By LANANH NGUYEN
LYNDHURST (Bloomberg) -- The Grangemouth refinery will probably stay shut for
the time being after talks broke down between its owner Ineos
Group Holdings and the Unite union over plans to cut costs and
changes to wages and pensions.
Ineos, which operates the 210,000 bpd facility and a petrochemical plant, said the union
refused to rule out industrial action during a 60-day
consultation on the companys cost-cutting plan. Unite,
the UK's largest union, said it would only return to talks if
the company suspends the proposal.
For any negotiations to take place they have to drop
the imposition on the workers, Peter Welsh, a spokesman
for Unite, said by phone.
Employees already offered to hold off on any industrial
action until December 31 in the last round of mediated talks,
which ended without a deal this week, Welsh said.
Unite called off a 48-hour strike on October 16 which
threatened to cut about 45 % of United Kingdoms crude
production. The site supplies power and steam to BPs
neighboring Kinneil processing plant, which handles crude from
the Forties Pipeline System, gathered from more than 80
Workers at Grangemouth, which processes about 80 % of
Scotlands fuel, held a two-day strike in 2008 that curbed
North Sea crude output as well as disrupting fuel supplies.
The union refused to accept Ineos offer to restart the
Grangemouth plant in exchange for a commitment that there will
be no further industrial action this year after a meeting
this morning, Ineos said in an e-mailed statement.
The facility will continue to supply steam to Kinneil while
the refinery is offline, Richard
Longden, a spokesman for Ineos said by phone from London. The
Grangemouth oil refinery is jointly owned by Ineos and
PetroChina, while Ineos is the sole owner of the petrochemical site, which has a
capacity of 1 MMtpy.
Scotlands First Minister Alex Salmond met with both
parties, urging Ineos to restore production and calling on the
union to pledge not to strike until the end of the year,
according to a statement from the Scottish government.
Restoring full production after the outage could take weeks,
Ineos said. During the eight weeks it took to reach normal refinery operations after the 2008
strike, a compressor caught fire and crude oil leaked, the
Workers had planned a walkout on October 20 because of a
dispute over union leader Stephen Deans and disagreements over
pay and conditions. The parties failed to reach a deal after
two days of talks this week mediated by United Kingdoms
Advisory, Conciliation and Arbitration Service.
Ineos started direct consultations with employees, including
a proposal to replace a final salary pension plan, change
working terms and close inefficient units, the company said.
The company aims to get a response from workers by October 22
and will consult its shareholders about resuming production
after that, Longden said.
Unite is looking to take legal action over the plan, which
it said introduces pay freezes and pay cuts, the