UPDATE 2-Strike at UK's Grangemouth refinery called off -union
* Fire broke out at unit during shutdown - owner Ineos
* Deal scuppered by extra Ineos demands - Unite union
* Dispute goes on over treatment of union representative
* Strike had threated pumping through North Sea crude pipeline (Writes through, adds union comment, detail)
By Simon Falush
LONDON, Oct 16 (Reuters) - A strike at the Grangemouth refinery in Scotland, which was due to start on Oct. 20, was called off by the Unite union on Wednesday, although the dispute that caused the action remained unresolved.
The refinery provides most of the fuel for Scotland, and is also crucial to the pumping of crude oil from the North Sea.
The operator of the refinery and attached petrochemical plant, Ineos, made no comment about the strike, but a spokesman said there had been a fire when a unit at the plant was being brought down to a "cold shutdown" status.
Unite had called the 48-hour strike over Ineos's treatment of one of its representatives, Stephen Deans. The parties subsequently agreed to hold talks under the auspices of the independent arbitration service ACAS. But Unite said Ineos had made unreasonable demands.
"Unite will now call off all industrial action with immediate effect in order to protect this national asset from the scandalous behaviour of its owner," said Pat Rafferty, regional secretary of Unite.
"At 5 a.m. (0400 GMT) this morning, ACAS representatives informed us that we could not conclude an agreement because a list of fresh demands were placed upon us and because 'Jim (Ratcliffe, Ineos chairman) wants an apology', and that this was 'a deal-breaker'," Rafferty said.
"I have never came across anything like this in over 30 years of employment relations, and it is utterly reprehensible."
Energy Minister Edward Davey welcomed the decision to call off the strike and urged both sides to continue to seek agreement with the help of ACAS.
Ineos said on Monday that units at Grangemouth, which has a capacity of 210,000 barrels per day, were being shut down and brought to a "cold status" ahead of the stoppage.
The refinery, owned jointly by Ineos and PetroChina , is an important supplier of gasoline to Scotland and the north of England. It also supplies steam and power to BP's Kinneil oil terminal, which processes North Sea crude that comes ashore via the Forties Pipeline System.
Separate from the immediate dispute with the union, but adding to tensions, is Ineos's plan to cut jobs and pensions at the petrochemical plant, which it says has been losing money for four years and will have to close unless costs can be cut. (Additional reporting by Claire Milhench; Editing by Jason Neely and Kevin Liffey)
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