Strike to close Grangemouth refinery Sunday

Refinery workers at Grangemouth refinery will begin a two-day strike on Sunday that will shut the plant and squeeze fuel supplies in Scotland and northern England.

Talks between the union and the plant's operator, Ineos, broke down Wednesday over a company proposal to modify the salary pension plan, a union official said.

"The strike will proceed on Sunday," Phil McNulty, national officer for the UNITE union told reporters at ACAS mediation services, where talks had been taking place.

Ineos CEO Tom Crotty said "the union rejection means we have no option but to completely shutdown the Grangemouth site to be sure it is safe during the 48-hour strike."

A full shutdown of the 200,000 barrel-per-day refinery could trigger a fuel crunch in Scotland and northern England, areas that are already facing some sporadic fuel shortages amid motorist stockpiling.

The refinery, which is integrated with a petrochemicals plant, had already begun shutting down a crude distillation unit on Monday in anticipation of the strike.

McNulty said the union and Ineos had come to an agreement on the safety and integrity of the plant during the strike and added that both sides had agreed to maintain fuel supplies to vulnerable customers.

"We are keeping calm. We have an agreement about the safety and integrity of the Grangemouth site. There will be no incidents" in the coming days, he said.

Aside from cutting into refined fuels supply, any shutdown of the refinery could affect flows on the BP-operated Forties crude oil pipeline system, which has the potential to cut up to 20 percent of Britain's natural gas supply, analysts said.