Petroineos said it has invested more than $1.2bn (£900m) in the refinery since 2011 while recording losses of more than $775m (£594m) during the same period.
The company had also been under pressure to decide whether to spend money on securing a new licence for its crude distillation unit, which was due to expire next spring.
Insiders say that doing so would have involved an investment of £40m, said to be an unattractive prospect given the scale of the plant’s losses.
Derek Thompson, the Scottish secretary of trade union Unite, said: “There’s been no plan by the UK or the Scottish government and what we’re effectively going to see is 400 workers put on the scrapheap”.
He added that the decision would have “devastating consequences” for the wider area.
Consultation on the redundancies will begin this month.
The firm said the new terminal would be able to import petrol, diesel, aviation fuel and kerosene into Scotland from vessels arriving via the Firth of Forth.
Grangemouth is one of six refineries in the UK and the only one in Scotland.
In recent years the site has been targeted by environmental protestors calling for it to be closed.
Scottish Labour leader Anas Sarwar called the news “a deeply disappointing decision”.
Michelle Thomson, the Falkirk East MSP, called for similar support for Grangemouth as that provided for Tata Steel earlier this week, to help ease the green transition.
At First Minister’s Questions she said she had been in discussions with a third party regarding a purchase of the refinery, and later told BBC Scotland it was an international company not based in Russia.
A spokesman for Petroineos told BBC Scotland that there had been “plenty of time” for potential buyers to express an interest and that it would “have engaged seriously with any credible proposition”.
The spokesman added the company had reached out to Thomson for further details.
The INEOS businesses at Grangemouth – INEOS O&P UK and INEOS FPS – released a statement saying it was ““business as usual” for those companies.
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