Deal struck for sale of Lindsey Oil Refinery

Lindsey Oil Refinery is to be sold to a neighbouring business, but there are no plans to restart standalone refinery operations.

The North Lincolnshire site was taken over by the official receiver in June following the collapse of owner Prax. It will now be bought by Phillips 66, which runs a refinery next door.

Energy Minister Michael Shanks said: “This agreement marks the next step in securing an industrial future for the Lindsey site and the workers, who were badly let down by their former owners.”

However, the Unite union said Phillips 66 should not be allowed to turn the site into a “glorified storage tank”, adding it would be “demanding consultations” with the supplier.

The sale of the site is expected to be completed in the first half of the year.

About 250 employees remain there after 124 of their colleagues were made redundant at the end of October.

In December, the receiver said the remaining workers would be guaranteed employment until the end of March.

Phillips 66 said it had agreed to buy the Lindsey refinery and planned to integrate the operations, including “storage and other infrastructure assets”, into its own site.

It said it had decided not to restart standalone refinery operations at Lindsey because it was not “viable in current form”, but there would be opportunities to “drive future growth” in renewable and traditional fuels.

Paul Fursey, the firm’s lead executive, said: “We recognise and deeply sympathise with how difficult the closure of the site has been for the workforce and the local community.

“This sale is the best way forward to secure jobs, bolster the local economy and encourage investment in the region.”

Shanks said: “Phillips 66 is an experienced and credible operator, and today’s sale agreement allows them to quickly expand operations at its neighbouring refinery, with all remaining staff guaranteed employment until the end of March.

“This will expand the company’s ability to supply fuel to UK customers, boosting domestic energy security and securing jobs – including hundreds of new construction jobs over the next five years.”

Martin Vickers, the MP for Brigg and Immingham, said he was “disappointed” that a “viable bid didn’t come forward to maintain full production on the site”.

“That clearly would have been the preferred option.

“Phillips 66 are a good employer in the area and in one sense that’s reassuring but the fact we’ve already lost 124 jobs which are not going to be replaced is bad news.”

Vickers said he has asked Phillips 66 and ministers involved for a meeting to find out “in more detail” what was being proposed.

“I’m amazed that the government find it acceptable in effect to lose production on another refinery,” he said.

Councillor Rob Waltham, the leader of North Lincolnshire Council, said it was “positive that a serious investor” was stepping in.

“But this is only part of the picture,” he added. “There is more to do, and there are still important questions that need clear answers.

“The stakes remain high and government cannot step back at this point – these are skilled, high-quality jobs that matter to families in Lincolnshire and to the country’s energy resilience.”

Gareth Allen, the official receiver, said every effort had been made to secure a buyer and ensure a future for the site.

“My legal responsibility is to seek the best possible outcome for creditors when companies go into liquidation and this has been achieved,” he said.

The conduct of the company’s former directors was the subject of an ongoing investigation by the Insolvency Service, Allen added.

Sharon Graham, Unite’s general secretary, said: “The government should be working with Phillips 66 to ensure this sale retains and creates jobs and helps safeguard the nation’s energy security rather than harming it.

“The Labour government needs to finally get into gear. It’s net zero policies are hurting workers – it’s time it showed them whose side it is on.”