A convoy of tankers seen at the Grangemouth oil refinery in Scotland in this file photo. Grangemouth refinery was cutting fuel production on Monday, shutting down a primary crude oil distillation unit as it prepared for its workers' union to strike on Sunday, the refinery operator said. JJM/Reuters/File

LONDON (Reuters) - A major refinery cut production on Monday ahead of a worker's strike planned for next weekend, sending fuel price futures soaring and helping drive oil to a new record high above $117 a barrel.

Workers at the 200,000 barrel a day Grangemouth refinery in Scotland, which is integrated with a large petrochemicals plant, have threatened a two-day strike on Sunday over pension cuts.

A shut-down at Grangemouth could also cut flows of North Sea crude into Britain and hit British gas supplies if the Forties pipeline, which feeds the refinery, is forced to close.

Refinery owner Ineos' Communications Manager Richard Longden said the shutdown was starting on the petrochemicals side and moving to the refinery.

"It will take about a week from start to finish," Longden said by telephone.

Ineos said it was shutting a primary distillation unit, which takes in North Sea crude and processes it for further refining into consumer fuels.

Worries about a supply disruption at Grangemouth was one of the factors helping push U.S. oil futures to a new record high of $117.40 a barrel on Monday.

Oil traders said the effects could be felt first on the diesel market.

"It's more a diesel problem than anything else," said one London based oil trader.

The threat of shortages pushed the price of London ICE gas oil futures, the basis for diesel prices throughout Europe, within a few dollars of their all time record high of $1079 per tonne. European gasoline hit a record of $1002 per tonne.

In New York, gasoline futures surged to their record high of $3.0040 a gallon and heating oil, the basis for U.S. diesel and heating oil prices hit its all time peak at $3.3243 a gallon.

Workers have threatened to strike over pensions on April 27-28 at the refinery at Grangemouth on the east coast of Scotland, which the plant's owners said over the weekend would force the facility to close for at least a month.

A full shutdown of Grangemouth would force Scottish suppliers to import cargoes from elsewhere in Europe or seek supplies from refiners in northern England.

"The petroleum industry has an ability to handle the potential closure of Grangemouth," said Luke Bosdet, a spokesman for the AA, a motorists association.

FATE OF FORTIES

A spokesman for Ineos said on Friday the refinery's closure would have a "significant impact" on the Forties pipeline which brings crude oil from a number of North Sea fields into Britain at Grangemouth.

Oil major BP owns the Forties Pipeline system, which carries on average around 700,000 barrels per day of crude oil from the North Sea.

If that pipeline were to shut, it could also force the closure of the Britannia gas field, cutting gas flows to British consumers.

"We are currently seeking clarification from the management at Ineos as to the potential impact on Forties Pipeline System operations," a spokeswoman for BP in Aberdeen said.

"Until we understand the detail of the industrial action that is being proposed then we cannot comment any further."

The pipeline comes ashore at Cruden Bay on the east coast of Scotland and then transports the oil to a processing facility at Kinneil.

Kinneil is adjacent to the Grangemouth refinery. Some of the oil ends up at Hound Point, the Forties terminal in the Firth of Forth, where it can be loaded onto tankers.

The impact of any disruption at Grangemouth on the Forties pipeline is uncertain, according to a source familiar with the situation. "It depends on the extent of the Grangemouth shut down and which parts of the refinery are shut down."

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