UPDATE 1-Ineos gives Grangemouth workers pension ultimatum
* Ineos proposes pension cuts
* Says cost cutting vital for plant's survival, union disputes Ineos figures
* Workers have until Monday to respond
LONDON, Oct 17 (Reuters) - Ineos said on Thursday that the Grangemouth refinery and petrochemical plant it operates in Scotland can only re-open if workers next week accept cuts in pensions benefits and changes to union representation.
The company and its workforce remain entrenched in a bitter dispute that could end in the closure of a second UK refinery in two years after Coryton, in the east of England shut in 2012.
The Swiss-based firm has given workers until Monday to respond to its proposals, and would decide on Tuesday what to do with the plant on the basis of that decision.
"The site is safely closed whilst we consult the workforce," Callum MacLean, Ineos Grangemouth chairman said.
Unite condemned the move.
"This is cynical blackmail from a company that is putting a gun to the heads of its loyal workforce to slash pay, pensions and jobs," Pat Rafferty Unite's Scotland secretary, said.
The future of the refinery is being closely watched as it supplies most of the fuel for Scotland and provides steam and power to BP's Kinneil oil terminal, which processes North Sea crude that comes ashore via the Forties Pipeline System.
A BP spokeswoman said on Thursday that the pipeline was operating normally.
Unite is staging small protests outside companies around Britain and overseas that have connections with the petrochemical and refining company.
One protest seen near Reuters London headquarters in the Canary Wharf financial district was outside the offices of a bank which Unite protesters said lends Ineos money.
REFINERY SECTOR WOES
The company has said that the loss-making plant's survival is dependent on putting it on a more secure financial footing, and that without big cost cuts, it will close by 2017.
The permanent shutdown of Grangemouth could herald a new wave of closures in the sector as the industry battles rising competition from new plants in Asia and the Middle East and dwindling demand at home.
The union disputes the company's analysis of the financial situation at the plant, and says that the company as a whole is making large profits.
Ineos said in a statement it offered to replace a pension scheme that pays a percentage of salary with one that relies on contributions from employees, in return for a cash payment.
It also said that the staff "would have a more modern approach to work place representation".
"We want to have new union agreements, one for each business area, which are refining, chemicals and infrastructure," a spokesman said.
The company said it was putting the offer directly to workers because the union, with which it has been engaged in a lengthy dispute has refused to discuss the issues.
A Unite spokesman said that the union was not able to comment until it had received feedback from representatives who were at a meeting with the company.