In this article, Global PMI Partners, the post-merger integration specialist, questions the future of the UK’s refining capability, discusses the key options to government and whether or not the insolvency of Prax Group gives UK Plc an opportunity to get back on the front foot of our energy security agenda.
The recent news around the Prax-owned Lindsey Oil Refinery, again raises a big question for UK plc; is energy resilience robust enough and is there sufficient security of supply to meet industry, household and military fuel and energy demands in the UK? In simple terms is there enough petrol, diesel, aviation fuel etc. available in the UK at any given time to cope with daily energy demands. The answer, with an increasingly fragile supply chain is only just, providing daily imports into the UK doesn’t face any disruption.
For historical context, the UK once had 18 operational oil refineries in the 1970s. At the beginning of this year, the UK had 6 operating oil refineries, all under all or part foreign ownership, other than the Prax Group owned Lindsey Oil refinery based on Humberside. As of today, only five remain, following the closure of Coryton, Milford Haven, and most recently the cessation of refining at the PetroIneos site at Grangemouth. With Lindsey now set to close, the UK will lose another 20% of its refining capacity, further accelerating the country’s dependence on imports.
Grangemouth ceased crude processing in April 2025 and will be converted into an import terminal by mid-2025. It follows a Europe-wide trend where ageing refineries are shut down or converted for storage and biofuel blending, rather than modernised or replaced. With refinery closures continuing, the UK will become almost entirely reliant on external sources for finished fuels, a major strategic risk in times of geopolitical instability, shipping route disruptions, and extreme market volatility.
Import dependency and strategic risk
Even before the issues at Lindsey, the UK was overly reliant upon imports to meet the daily fuel demand in the UK. In 2023, 55% of diesel demand, 89% of aviation fuel and 25-30% of petrol was imported into the UK, mainly through independent tank storage companies operating around the coast of the UK. Look back to the 1970s and the UK had 18 refineries with very little need to rely upon foreign imports.
The recent news that the Lindsey Oil refinery will close is another blow for energy resilience in the UK. Lindsey was commissioned in the late 1960s, and even when Prax bought it from Total it was operating under full capacity. It has been known by governments for decades that the refinery was moving towards the end of its natural life and yet successive governments have ignored the long-term impact this has to the UK’s energy security.
There are consequences of the Lindsey oil refinery not operating and they’re not just inland fuel distribution in the Humberside and Yorkshire region. The Buncefield oil terminal in Hemel Hempstead is pipeline fed from the refinery and is one of the major terminals supplying the densely populated London region. One of Heathrow’s main aviation fuel feed lines from Colnbrook is supplied by this refinery.
Global disruptions intensify the challenge
Reliance on foreign imports is fine until something disrupts the supply chain or the oil markets. There are many current examples of major disruption. Sanctions on Russia have removed the direct supply of refined oil products into Europe and the UK. The Israel / Iran conflict threatens further uncertainty, as does safe passage for ships through the Red Sea and the Suez canal.
These issues inevitably put pressure on energy resilience. Oil cargoes have to be sought from countries far away, meaning that large ships are needed to transport fuels to the EU. The UK’s ageing infrastructure, with some exceptions, struggles to handle large oil tankers, which instead will typically offload in Rotterdam or Antwerp, meaning that transshipments to the UK are now the norm.
If the UK is to survive on increasing imports from overseas, how will its infrastructure cope and adapt with increasing imports? Converting former oil refineries to become import terminals is one answer, as is currently happening at the former Grangemouth refinery. However, this isn’t a zero-cost option, and the owners of the Grangemouth facility were recently awarded grant funding from the UK Government. The same will likely be required to recover from the closure of Lindsey and convert this facility to enable large scale imports.
Why the hydrogen question matters?
There may be an opportunity to rethink the future of Lindsey, not as a refinery, but as a hydrogen production and distribution hub. Government investment in Teesside and the Humber region shows a willingness to fund industrial-scale hydrogen transition infrastructure. Repurposing Lindsey, which already has pipelines, industrial footprint, and proximity to maritime supply chains, would help retain energy sector employment, increase strategic resilience, and demonstrate leadership in the energy transition.
This would align with UK policy directions set out in the Hydrogen Strategy (BEIS, 2021) and the Net Zero Strategy (2021), both of which prioritise the conversion of high-emitting assets into green infrastructure. While no formal proposal exists yet for Lindsey, similar repurposing has been proposed for Stanlow (Essar) and Southampton (Fawley).
What next for the UK?
The outlook isn’t great, as the UK’s remaining 4 oil refineries were all built decades ago, with continued speculation over which one might be next to close. Is this survival of the fittest? Probably. And some will survive as they are owned by responsible shareholders who invest heavily in their ongoing maintenance and upkeep. Will there be new refineries built in the UK? Highly unlikely given poor refinery margins and high production costs, the drive for decarbonisation and net zero. Worthy goals, but what happens in the meantime? And what happens when the next supply chain disruptor appears?
Could this have been avoided? Of course it could, and relevant trade associations have long since lobbied government departments and called for improvements to strategic storage, energy resilience and security of supply.
We’re no longer part of the EU, the UK’s biggest trading partner. Let’s hope they keep sending us the fuel we need for our everyday livelihoods. The UK will adapt, and either convert former refineries to cater for foreign imports or the independent tank storage companies will expand their import capabilities. The issue that cannot and should not be overlooked though is the UK’s increasing vulnerability, reliance on overseas trading partners and reduced energy resilience, and security of supply.
Russian crude
On top of this, is the issue that importing refined materials drives a lack of control of the source of the crude being refined, as is the case on refined imports from India. India imports crude oil from Russia, refines it and sells it back to the west, therefore avoiding the sanctions on Russian oil. The more dependent we are on imports, the more we indirectly fund the war in Ukraine.
The global context: Refining shrinks in the West
OECD refinery capacity is falling. The International Energy Agency (IEA) notes a decline of nearly 490,000 barrels per day in 2025 among OECD nations. In contrast, Asia and the Middle East are expanding their refining footprints. This shift increases global imbalances in refinery ownership and control, putting import-reliant countries like the UK at risk of price manipulation or supply prioritisation by other regions.
Other countries have recognised this and responded. France maintains a minimum number of active refineries under a national strategic resilience policy. Germany recently co-funded upgrades at its refineries to ensure some domestic processing remains viable even during transition years.
Private equity and M&A playbooks
Prax’s acquisition of Lindsey from Total in 2021 followed a familiar pattern: buy an ageing, low-cost refinery during a downturn and extract value through logistics, storage, or conversion. But this strategy depends on short-term commercial interest, not long-term national resilience.
Private equity and international commodity traders (e.g., P66, Vitol, Glencore, Trafigura, VTTI) are drawn to these opportunities. However, without regulatory oversight or aligned national energy strategy, the UK risks losing control of its energy value chain.
UK policy recommendations
This is a national security issue. We recently reached agreement across NATO where, of the target of 5% GDP to be spent on defence, 1.5% can be spent indirectly. Therefore, there is a case for maintaining an independent refining capability as a matter of national defence security, and to use part of the 1.5% of indirect defence spending to bolster this key strategic capability. Combine that with the potential to invest in driving the UK’s green agenda towards hydrogen, any investment then starts to look attractive as part of our commitment to net zero.
- Develop a UK National Refining & Fuels Strategy – Not just for today’s fuels but also for the hydrogen, sustainable aviation fuel (SAF), and energy transition pathways.
- Launch a Strategic Refining Resilience Fund – Modelled on German industrial transition funds, to support decarbonisation or conversion of legacy refining assets.
- Consider hydrogen transition for Lindsey – A feasibility study should be commissioned to explore its viability as a hydrogen production or import terminal.
- Protect critical infrastructure through oversight – Refinery conversions should not proceed without government approval where national supply resilience is at stake.
- Coordinate stakeholders – Create a taskforce that brings together government, fuel retailers, airport operators, energy investors, and infrastructure specialists to align supply security and decarbonisation.
The future of Lindsey
In probability, given the lack of vision of the UK government (past and present), it is likely that a corporate or private equity buyer will seek to acquire Lindsey and convert it to another import terminal, especially given the lack of storage capacity in the UK overall, and due to the significant requirement now to import refined product rather than unprocessed crude. The major players are likely to be P66, Vitol, Glencore, Trafigura, VTTI, Gunvor and, Klesch. Glencore is reported to be in talks with the UK Government over the future of Lindsey. While the status of these talks is unknown, Glencore’s contract to supply crude oil and feedstock to Lindsey would likely have been structured to take collateral against assets and finished products in the event of a default.
Conclusion
The closure or conversion of UK refineries is not just a commercial decision, it’s a national resilience issue. The time for reactive response is over. We should, and indeed must, now shift toward strategic foresight and proactive positioning, whether that means saving our last refineries or turning them into the hydrogen backbone of a future-proof energy system. We strongly advocate that the government reclaims our national security and places UK energy independence on the front foot, however, it is in all likelihood that the Lindsey site will remain in private hands, relying on short-term thinking to a long-term problem.
About Global PMI Partners
Global PMI Partners specializes in post-merger integration services, having managed over 500 M&A projects across 35 countries, focusing on seamless integration, risk mitigation and value creation.
Global PMI Partners offers specialised expertise in post-merger integration for those seeking industry-focused integration and transformation support. GPMIP also provide interim resources, designed to support short-term BAU gaps or backfill roles where internal teams are focused on live deals. We cover all core functions, and our key differentiator from traditional search firms is that we have a known and trusted team, enabling us to make resources available to clients in as little as a day.
Authors
Mark Bevan – Managing Partner & UK CEO at Global PMI Partners
Martyn Lyons – Associate Partner, Energy and Resources at Global PMI Partners and previously President of the UK Tank Storage Association and CEO of Inter Terminals.
Roy Mitropoulos – UK Associate Partner, Energy and Resources at Global PMI Partners, and an industry expert
Ian Smith – Strategy Consultant at Global PMI Partners