U.S. firm signs agreement to acquire Come By Chance plant
Fewer jobs in biofuel production but union relieved on news of purchase agreement
The union representing workers at the Come By Chance refinery says a deal to sell the idled oil refinery will likely result in fewer jobs for its membership, but that’s better than nothing.
Glen Nolan, president of the United Steelworkers Union Local 9316, says a deal between the current owner of Nworth Atlantic Refining Limited Partnership in Come By Chance, an investment firm called Silverpeak and a private equity firm, Cresta Fund Management, should provide work for around 200 or so union members.
“At the end of the day if we didn’t get this deal we would have been shut down,” Nolan said in an interview Tuesday.
News of a sale agreement was revealed Monday. It was the same day refinery employees were informed of the latest development in the ongoing saga of Newfoundland and Labrador’s only oil refinery.
It has been reported that Texas-based Cresta Fund Management has agreed to buy a controlling stake in the NARL and convert it to renewable fuels production.
When the refinery was producing oil from fossil fuels it was turnout about 130,000 barrels of oil daily and employing 500 people.
Chris Rozzell, Cresta’s managing partner, told Reuters that the first phase of the conversion will see the refinery producing 14,000 barrels of sustainable aviation fuel and renewable diesel daily by mid-2022.
A second phase will seek to double the capacity of the refinery and enable the facility to produce green hydrogen — using wind or solar energy to extract hydrogen. The value of the transaction is not known.
Refinery production was stopped in March 2020 as the COVID pandemic took hold around the world and demand for jet fuel and oil products took a dive. About 200 union and management employees have continued to work at the refinery thanks to funding provided by the provincial government to keep the refinery in “warm idle” mode.
The plant was put on socalled warm idle while a search was started for a new owner for the facility.
With lower daily production with biofuels, it means fewer people will be needed to run the facility.
“It’s not where we wanted to be (with jobs),” said Nolan, “but there was no alternative. This was the only company that expressed interest in buying the refinery.”
Besides, he said, the world is turning to low-carbon energy and biofuels are the way of the future.
“We have a collective agreement that we just passed with 96 per cent support of the workers. And we will be signing that, hopefully, now once Cresta wraps up the purchase/ sale agreement with Silverpeak.”
In a meeting Tuesday morning, representatives of Cresta gave Nolan and others some information about the plans for the business.
Nolan said he was told Silverpeak will still have a percentage of ownership of the refinery and will run the logistics side of the operation.
Conversion of the refinery to biofuel production will mean an engineering and construction phase.
Nolan said he hopes that will mean an opportunity for some additional union workers to be re-hired for the refit work.
Even though there will be fewer jobs in the production of biofuels, Nolan said the union is happy the deal is finally done.
It’s been more than a year of uncertainty and temporary measures and Nolan admits people were starting to lose hope that a deal would ever be done.
While there are more details to come, Nolan said “There was applause today at the meeting.
“It’s a good news story until we see anything different.”
No one was available from the Town of Come By Chance to comment. That municipality has a tax agreement in place with the refinery that adds about a half million dollars to the town’s annual revenue.
In the nearby Town of Clarenville, about 50 kilometres from the refinery, many workers had been making the daily commute to work at Come By Chance. The refinery jobs have had a trickle-down effect for the town, which gives it a strong residential tax base and money to support local businesses.
“Time was moving on and people were becoming very skeptical on whether the refinery would even have a future,” Clarenville Mayor Frazer Russell said.
Still, he said, a workforce reduction from 500 to about 200 jobs could have an impact on the local economy.
Up to now, said Russell, not many of the laid-off refinery workers had left the region. The big question is, how many of them will stick around if there’s no chance for them to get called back to work?
If some of them do move on, he said, it will be a big loss for the local economy.
“I’m not sure how many of them had retirement packages, or buyouts, so we’ll have to wait and see what those numbers are to see what the impact will be.”