LOCAL Come By Chance refinery sold
But company’s purchase of North Atlantic Refinery Ltd. could take months
Newfoundland and Labrador Natural Resources Minister Siobhan Coady says she has been told Irving Oil will reopen the Come By Chance refinery and even plans to “ramp up” operations once the New Brunswick-based company’s purchase of the facility becomes official.
The question now is when that might happen.
On Thursday, Irving announced it is acquiring North Atlantic Refining Ltd., which includes the Come By Chance facility and deepwater port at the head of Placentia Bay; retail facilities, many of them under the Orange Store brand; and a heating oil arm servicing homeowners and commercial clients.
North Atlantic Refining has been owned by Silverpeak, a New York-based investment management firm specializing in energy and real estate holdings, since 2014.
Details of the tentative sale, including the price, have not been announced. Coady noted the transaction is subject to regulatory review and other conditions.
“We have to respect that it has to go through the regulatory process and that could take some time. It could take 60 to 90 days,” said Coady, noting the federal competition bureau will be involved.
If the sale is approved, Irving would own the only two oil refineries in Atlantic Canada. It has one in Saint John, N.B., which is Canada’s largest, with a capacity of 320,000 barrels per day.
The New Brunswick refinery is operating, but the Come By Chance operation, which employs about 400 people, has been idle since late March.
Neither the original news release from Irving or a follow-up statement from the company indicated definitive plans to reopen the Come By Chance refinery, which can handle 132,000 barrels a day. However, after speaking to Irving officials Thursday afternoon, Coady said she had been told that was the intention.
“They advised us that they are excited by the purchase (and) they feel the refinery is a great fit with their existing integrated operations,” said Coady, “and that their intent is to ramp up operations at the refinery once the sale is final and to continue to provide a secure supply of energy to customers across the province.”
The head of the union representing 300 workers at the refinery says he is treating the pending sale of the 47-yearold facility as “a good news story.”
However, Glenn Nolan also offered a qualifier.
“Let’s put it this way, I’m looking at it being a good news story, for now,” said the president of United Steelworkers Local 9316.
“We still need more details. Obviously, the first thing is whether there are plans to start up and when that would be,” said Nolan, who found out about the sale a half hour before it was announced, “but right now, I’m treating it as a good thing, at least until I find out anything different.”
Nolan wasn’t the only one seeking more information. A spokesperson for Noia, the association representing more than 500 companies in the provincial oil and gas sector, said it was holding back on any official comment until more details emerge.
While Thursday’s announcement could be described as unexpected, it might also be suggested the sale has been years in the making. Just over three years ago, the Reuters news agency reported Irving had made a bid to buy the refinery and North Atlantic operations, but that the deal fell through because of an internal disagreement at Silverpeak.
A request for comment from Silverpeak through its North Atlantic media representatives led to a brief response saying “the team is unable to provide further information as this is a pending transaction.”
Coady suggested Silverpeak made the refinery a more attractive investment in the past few years.
“Silverpeak really made a difference, going from 90,000 to 134,000 barrels a day,” she said. “It was in a good position before COVID struck and they have been able to make this arrangement.”
Last fall, Silverpeak was talking about expansion at Come By Chance, including construction of a long-talkedabout coker plant, and possibly a pipeline connected to the nearby terminal at Whiffen Head, where oil produced on Newfoundland’s offshore is landed.
There were also plans to increase capacity in the coming years.
How those designs fit into Irving’s vision of ramping up the facility remains to be seen.
“There is still a lot to find out,” said Nolan, who suggested the refinery’s reopening will have less to do with the public health implications of the COVID-19 pandemic and much more with the global oil markets, which have suffered because of an OPEC price war and an economic downturn that has run collaterally with the coronavirus outbreak.
“It will be good to get to a Level 3 (in provincial pandemic restrictions),” said Nolan, “because that means there is a sense of more safety for our workers and for the province in general.
“But when it comes to the question of when our members will be back to work, I think that’s all about the economics.”