Petroineos Manufacturing Scotland, the 49.9:50.1 joint venture of Ineos and PetroChina that operates the refinery at Grangemouth, made a £16.3 million pretax loss in 2014 on sales up 11% to £240 million, according to reports recently released information.

The operating loss narrowed to £10.5 million from £17.2 million, but interest on outstanding loans nearly doubled to £6.58 million.

Petroineos said “trading conditions in the refining sector continued difficult” last year, reflecting slow growth in Europe and import competition. At the same time, it was able to reduce costs by £32.8 million, as a step toward “restoring sustained profitability and improving cash flow in the long term.”

In the first half of 2015, the refining company, which processes around 210,000 barrels of crude oil per day to supply the fuel markets of Scotland, northern England and Northern Ireland, said it delivered strong margins but the longer term outlook “remains challenging in the current economic climate.”

Although the refinery activity is integrated with Ineos’s petrochemical production at Grangemouth, Petroineos operates as a separate business. In 2011, Ineos sold nearly half of the refinery to PetroChina to meet its debt service obligations.

During the protracted dispute with the Grangemouth trade union Unite in 2013, the Swiss-based petrochemicals giant threatened to shutter both the refinery and petrochemical production.

Going forward, Ineos is initially banking on US shale gas imports and later its own shale production to replace what it says is a dwindling supply of North Sea feedstock.