Grangemouth deal will safeguard 2,000 jobs

Published on Monday 10 January 2011 17:08

MORE than 2,000 jobs in Scotland's oil industry will be safeguarded after China's biggest oil and gas producer announced an agreement with the owner of Grangemouth refinery.

The joint venture between Grangemouth operator Ineos and PetroChina is one of a string of deals announced this week as delegates from a Chinese trade mission, led by Chinese vice-premier Li Keqiang, made a visit to Scotland as part of a four-day UK tour.

A 6.4 million agreement to introduce renewable energy technology pioneered in Scotland into China was announced on Sunday.

The deal with PetroChina will see investment into its refining operations at Grangemouth and could lead to joint ventures in trading and refining between the two firms - but specific details are yet to be drawn up.

CBI Scotland assistant director David Lonsdale said: "This hopefully heralds the start of a step change in our economic and business relationship with China.

"That's good news for them, but its also good news for us. Our economy needs to be much more driven by trade and by business investment and obviously China is one of the fastest growing economies in the world."

The value of Scottish exports to China already stands at 325m, but this is expected to grow in the coming years.

Jane Gotts, international director of the Scottish Council for Development and Industry, was part of a Scottish trade mission to China led by First Minister Alex Salmond last year.

She said China is a "very lucrative" market for Scottish firms, particulary luxury items like cashmere, whisky and golf tourism. The Chinese drive in to develop renewable energy technology could also spur further inward investment in Scotland by "cash rich" firms she added.

"Energy is key and what's been a recent phenomenon if you talk to the Chinese is a real emphasis to learn about renewable technology," she said.

"They can move quite quickly, they have a lot of money. You only need to look at the investment the Chinese are making in Africa to recognise that they are being very strategic in where they're doing their business. Scotland would be well placed to take advantage of that."The Grangemouth deal also covers the Ineos refinery in France and opens the potential to share petrochemicals technology and expertise.

Ineos chief executive Calum MacLean said: "These deals are the start of a long-term relationship between Ineos and PetroChina, creating a partnership between one of the world's largest petrochemical companies and one of the world's largest energy companies."

Sandy Dobbie, chairman of industry body Chemical Sciences Scotland, said: "Ineos's manufacturing sites in Grangemouth should benefit from the investment by PetroChina, enabling them to be modernised to 'world class' standard."

The Grangemouth refinery, on the Firth of Forth, processes about 210,000 barrels of crude oil per day, providing fuel to Scotland, northern England and Northern Ireland.

Finance secretary John Swinney said: "This agreement provides further evidence of the strengthening of ties between Scotland and China."