BP has decided not to go ahead with the Grangemouth combined heat and power plant, blaming a challenging business environment.

The company has instead entered into a mutually beneficial arrangement with multinational chemical company, INEOS. A spokesman said BP has struck a new deal which will see it continue to supply dry gas and liquefied petroleum gases to INEOS, who in turn will continue to provide Kinneil in Scotland with power and steam.
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The original plan was to develop the Kinneil Oil Terminal and the company had won approval for that £400m project.

The spokesperson said: “This renegotiated agreement will mean that 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.”

Kinneil requires steam for heat energy to drive oil separation processes. The Scottish government said the site was to be a “strategic piece of oil and gas industry infrastructure” when approving the plans.

The output of the plant was expected to be 159 MW.

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