Refinery ‘unbelievaby important’
More than half of the facility’s employees live in the Clarenville or close by: mayor
It’s wait and see when it comes to the Come By Chance oil refinery, but the mayor of the town that’s home to the majority of the refinery’s workers says the waiting may be a little easier after hearing there are plans to reopen the facility, which has been sold to Irving Oil as part of that company’s acquisition of North Atlantic Refining.
The refinery has been closed for two months, a victim of the Covid19-expedited collapse of oil prices. However, after speaking with Irving Oil officials, Newfoundland and Labrador Natural Resources Minister Siobhan Coady reported Thursday that the New Brunswick-based company intends to return Come By Chance to full operational status “and that their intent is to ramp up operations at the refinery once the sale is final.”
Clarenville mayor Frazer Russell says that is positive news for his town of just over 6,000 people, many of them who have been wellpaid workers in Come By Chance.
“It was great to hear the minister say that,” said Russell Friday. “It would be great at any time to hear that a facility that is such a big part of the local and the provincial economy was going to be re-opening after being shut down. But with COVID-19 and the effect it’s has on everyone’s lives, it seems even more important to hear it now.”
Russell estimates 250 of the refinery’s 400 employees live in Clarenville or adjacent communities.
“And those are big-paying jobs, so it means economic benefits for the town and businesses in the town and in nearby places is much larger than it would be for most any other company,” said Russell, who agrees the presence of an operating refinery 45 kilometres away also contribute’s to his community’s vibrancy.
“It’s important that it employs so many Newfoundlanders, especially people from this area, but it also brings others to our town. There’s a real infusion, and not just of money. There’s an infusion of people bringing something special to Clarenville.”
While Coady relayed assurances for the long-term operations of the refinery, she couldn’t say when a return to production would happen. For one thing, the sale to Irving by Silverpeak, the New York investment firm that has owned the refinery since 2016, is classified both as pending and conditional; it is subject to regulatory reviews such as those by Canada’s Competition Bureau.
“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,” Coady said Thursday.
It is also not known how much Irving is paying in the sale, which would see it acquire the Come By Chance facility and deepwater port at the head of Placentia Bay; North Atlantic retail facilities and a heating oil arm.
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.
For its part, Irving hasn’t publicly announced its plans for Come by Chance, which has a capacity of 135,000 barrels per day. In emailed reponse in a request for information, Irving spokesperson Candice Maclean said the acquisition of North Atlantic’s assets is part of work “to invest in the broader Atlantic Basin.”
The company also operates the smaller Whitegate refinery, in Cork, Ireland, and a facility in the Netherlands that stores and blends petroleum products from Whitegate and other sources.
Like the New Brunswick refinery, they too have been remained open, “working together as a system has allowed each of them to operate in a time when others are finding it difficult.”
Maclean also noted Irving’s plans to bring crude oil from Western Canada to be processed in Saint John.”
“Our recently announced plans to source Canadian crude oil and (the) announcement in Newfoundland are two building blocks that fit together with our company’s existing business strengths,” she said.
Last fall, Silverpeak was talking about expansion at Come By Chance, including construction of a longtalked-about coker plant and a pipeline connection to the nearby terminal at Whiffen Head, where oil produced on Newfoundland’s offshore is landed.
There were also talk from North Atlantic about increasing capacity in the coming years.
How those designs fit into any plans of Irving “to ramp up operations” remains to be seen, especially given the current state of oil prices.
Russell, who is calling for a meeting involving mayors in the Clarenville-come By Chance area and Coady to learn more information about the refinery’s future, is hopeful those upgrades will come, but realizes the state of the global economy makes it less likely that would happen anytime soon.
“That’s not to say it won’t, but the main thing now is to get the refinery running again,” he said.
“Even when we have had lots of activity at (the offshore construction facility) Bull Arm — and those are good-paying jobs, too — that is work that comes and goes.
“That refinery has been around for nearly 50 years. The stability of that refinery’s operation is an unbelievably important thing for us in Clarenville.”