Petroineos said on Tuesday it plans to mothball nearly half of its 200,000 barrel-per-day refinery at Grangemouth due to a coronavirus-related drop in demand for oil, Reuters reported.

The union Unite Scotland said that up to 200 highly-skilled jobs could now be lost at the refinery.

The union said it has requested that the company utilise the five-month extension of the UK Government’s furlough scheme to provide more time to explore alternative options to save jobs at the plant.

The refinery operator said it plans to shut down its 65,000 bpd crude distillation unit (CDU) 1 as well as the 25,000 bpd fluidised catalytic cracker unit, used to produce gasoline.

Petroineos said the proposal has been put forward to its employees.

The two units were already closed due to the COVID-19 pandemic.

Petroineos is a joint venture between Chinese state oil firm PetroChina and privately owned chemical producer Ineos.

Unite Scotland said: “The company plans to reconfigure its operations citing a lower demand for fuels as the primary reason for the plans to mothball its Crude Distillation Unit and the Fluidised Catalytic Cracker Unit at Grangemouth.

“Petroineos has stated that it will initiate formal consultation with the workforce and Unite on 16 November over a smaller refining operation which would potentially lower the workforce from 650 to 450 jobs.

“The union has requested that the company utilise the five-month extension of the UK Government’s furlough scheme to provide more time to explore alternative options to save jobs at the plant.”

Sandy Smart, Unite industrial officer, said: “Unite is deeply concerned that Petroineos plans to mothball two of its units based at the Grangemouth refinery, which could lead to the loss of 200 highly-skilled jobs.

“We are acutely aware of the very challenging market conditions brought about by the Covid-19 pandemic that has resulted in a lower demand of fuels but there is now a vaccine within grasp which could significantly effect demand in the coming months.

“We firmly believe the proposal is premature and that Petroineos should instead be discussing with us how to effectively use the extension in the UK Government’s furlough scheme to give us more time to explore every option.

“The workforce also needs assurances from the company over the medium and long-term security of the plant.

“Unite will be entering a formal consultation process with the company but we will be insisting that any job losses, if they are to occur, then this should be on a voluntary basis.

“However, let me repeat, it’s our belief that these job losses can be averted and we call on Petroineos to work with us to deliver this objective.”