*

Comes weeks after UK's Grangemouth refinery stopped

processing

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Closure of Lindsey would increase UK's reliance on imports

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Insolvency service investigating causes of financial

problems

(Changes sourcing, adds background on refining in Britain,

details on Prax's retail network)

By Shadia Nasralla

LONDON, June 30 (Reuters) - Britain's Lindsey oil

refinery has begun insolvency proceedings, the government's

insolvency service said on Monday, raising the possibility of

its closure weeks after the country's Grangemouth refinery

stopped processing oil.

Lindsey is one of six remaining oil refineries in Britain,

according to the U.S. Energy Information Administration, and its

closure would increase Britain's reliance on fuel imports.

Lindsey, which has the capacity to refine 113,000 barrels

per day according to the website of its owner Prax, was placed

under a winding-up order alongside Prax Storage Lindsey Limited

and Prax Terminals Killingholme Limited, the government said.

There will also be an investigation into the cause of the

companies' failure and the conduct of current and former

directors, it added.

FTI Consulting ( FCN ) has been appointed special manager of the

companies, tasked with helping to liquidate them, the government

said on its insolvency service website.

Energy Minister Michael Shanks said in a statement that

Prax's financial reports showed the Lindsey refinery made losses

of around 75 million pounds ($103 million) between Prax buying

it from TotalEnergies in 2021 and February 2024.

He added that Prax had not adequately answered repeated

requests from the government about the losses, leaving the

government unable to assess Lindsey's financial viability.

Prax, led by Chairman and CEO Sanjeev Kumar Soosaipillai,

could not immediately be reached for comment.

In an earlier statement, management consultancy Teneo said

it had been appointed administrator of State Oil Limited, Prax's

parent group.

Teneo also said staff at Lindsey were currently remaining in

place and being paid.

State Oil joint Administrator Clare Boardman, of Teneo, said

that all options would be considered, including a sale of Prax's

upstream business and retail operations in Britain and Europe,

all of which remain outside of insolvency.

Prax's upstream business consists of the Lancaster oilfield

in the British North Sea, a geologically complex project which

has been in an early production phase for years.

The company runs around 250 retail fuel sites in Britain,

including TotalEnergies-branded stations, in addition to petrol

stations in Germany, Austria, Switzerland and Denmark.

($1 = 0.7299 pounds)