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The Prax Lindsey oil refinery in north Lincolnshire is to merge with a neighbouring rival, after the US energy company Phillips 66 bought the site, which collapsed into administration last summer.
The US company plans to integrate the former Prax operations with the nearby Humber Refinery, which it already owns. It said it would not restart the Lindsey site in North Killingholme as it was not “viable in current form”.
Prax Lindsey, in the Humber estuary in northern England, was one of only five refineries left in the UK when it collapsed in last June, with production stopping immediately.
The refinery had been bought in 2021 by Winston Soosaipillai and his wife, Arani, in an attempt to build an energy empire. However, alleged “irregularities” relating to the group’s debts resulted in the collapse of the Prax companies last year.
Soosaipillai, who is known by his middle names Sanjeev Kumar, is being sued by administrators for breach of his duties as a director. His whereabouts are unknown.
The price of the deal with the UK arm of Phillips 66 was not disclosed.
The government’s official receiver took control of the Lindsey operation after the collapse of its owner and a bidding process was launched.
Gareth Allen, the official receiver at the Insolvency Service who manages nationally significant corporate bankruptcies, said the deal with Phillips 66 was the “best possible outcome for creditors”.
Phillips 66, which is headquartered in Texas, has operations across oil refining, midstream, chemicals and renewable fuels. It has more than 14,600 employees.
The official receiver said in December that the 250 employees remaining at the site – after 125 were made redundant in October – would be guaranteed employment until the end of March. Their long-term future remains unclear.
The energy minister, Michael Shanks, said: “After a thorough process to identify a buyer for the site, the official receiver has determined Phillips 66 is the most credible bidder which can provide a viable future for this site.
“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.”
Paul Fursey, the Phillips 66 UK 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.”
The company said the acquisition would enhance operations at the Humber Refinery and improve the supply of fuel to UK customers.
At the time of Prax’s collapse, it included a North Sea oilfield, hundreds of petrol stations and Lindsey, an oil refinery that was responsible for 10% of UK fuel production.
By the time of its demise, the Prax Lindsey oil refinery had £203 left in the bank when the commodities trading group Glencore, which supplied it with crude, called in $53.6m in debt, according to documents that were first reported by the Times.
