EXCLUSIVE: BP pulls the plug on power plant

The new BP plant would have created 400 jobs. Picture: Michael Gillen
The new BP plant would have created 400 jobs. Picture: Michael Gillen

Oil giant BP has axed its multi-million pound combined heat and power (CHP) plant and the 400 jobs it would have created.

The company confirmed this week the project at its Kinneil site near Grangemouth, which had been given the green light by Scottish ministers a year ago, had been kicked into touch.

It claimed the plant, and the significant investment required to construct it, was no longer required because it had made a deal with neighbouring petrochemical firm Ineos to supply the power and steam the CHP plant would have.

The building of the plant reportedly had the potential to create 400 construction jobs, but these will no longer be required.

A BP spokesman said: “In a challenging business environment, BP continues to review how our finite capital investment funds can be most effectively and efficiently be spent.

“As part of this review, we have looked again at the requirement to invest in a CHP plant at Kinneil. Discussions have taken place with Ineos, the operator of the Grangemouth refinery and petrochemicals plant, who currently buy our gas products and provide the Kinneil site with power and steam.

“We have now reached an agreement in principle for Ineos to continue to purchase dry gas and liquefied petroleum gasses from us, and for them to provide Kinneil with power and steam.

“This renegotiated agreement will mean the substantial investment required for a new Kinneil CHP plant will now not be required. We believe this decision is in the best interests of the Forties Pipeline System (FPS) business as we continue to address the ongoing challenges and cost pressures facing the industry.”

BP Exploration Operating Company, which runs the oil stabilisation plant, applied to the Scottish Government for planning permission in January 2016 for the development which would have been constructed on the east side of Bo’ness Road.

The gas-fired CHP unit was going to use dry gas already produced on site, but which was currently surplus to existing requirements, to generate all the electricity BP needs to operate the entire complex.

At the time of granting permission, Energy Minister Fergus Ewing said: “This proposed development will provide welcome long-term security of service to developers of new oil and gas fields, at an otherwise challenging time for the wider oil and gas industry.

“There is consensus across stakeholders that we must retain critical infrastructure to ensure the long-term viability of the North Sea oil and gas industry.

“There is a long-term sustainable future for the North Sea – which will be supported by investments such as these.”