Strike to shut Scottish refinery processing North Sea oil

By BEN MCCONVILLE

EDINBURGH, Scotland

Workers at the Grangemouth oil refinery in Scotland are going ahead with a two-day strike that could force BP to shut down its main North Sea crude oil pipeline.

About 1,200 workers at the Scottish refinery will begin a 48-hour walkout on Sunday after talks with management to resolve a pensions dispute collapsed Wednesday night, the Unite union said.

BP PLC has said it is preparing for a possible shutdown of its Forties North Sea crude oil pipeline system -- which pumps up to 700,000 barrels per day into Britain -- if the strike proceeds.

Up to 200,000 barrels per day of crude oil is pumped into the refinery to be refined for the Scottish market.

Union officials had been meeting with managers from refinery owner Ineos PLC for two days. But the union said the talks had failed to resolve a dispute over pensions.

"The talks have collapsed and I am sorry to say the 48 hour strike is on. It is not good," a Unite spokeswoman said on condition of anonymity in line with union practice.

The union said the talks broke down after Ineos refused to withdraw plans to close its final salary pension scheme to new workers and to make other changes to its pensions.

The company announced earlier Wednesday it had already closed one of its crude stills at the Grangemouth refinery and plans to shut more.

Ineos has said it could take up a month for the refinery to resume full production if it is completely shut down.

Ineos Chief Executive Tom Crotty said the company had no option but to start shutting down the refinery Saturday night.

Crotty said the company had offered to suspend all proposed changes to the pension scheme.

"The plain fact is that the union seems hell bent on pursuing a strike that will cause chaos and disruption for the people of Scotland and across the U.K.," he said. x The AA, Britain's largest motoring organization, urged motorists not to panic.

"We have to put our trust in the petroleum industry to keep Scotland's pumps filled," AA spokesman Paul Watters said.

BP's Forties North Sea pipeline depends on Grangemouth for utilities such as steam and power that it needs to operate.

The pipeline supplies much of Britain's oil from about 50 North Sea offshore rigs.

"We will assess the situation when we speak to Ineos," a BP spokesman said on condition of anonymity in line with company practice.

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AP reporter D'Arcy Doran in London contributed to this report.