Harvest may expand Come By Chance refinery

David Whalen
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The owner of the Come By Chance oil refinery says it is considering a $2-billion expansion to its operations.

Calgary-based Harvest Energy, which bought the North Atlantic refinery in Come By Chance in 2006, said engineering firm SNC Lavalin has completed an eight-month analysis of potential refinery enhancement opportunities.

The expansion would increase the refinery's crude unit to 190,000 barrels per day, up from the roughly 93,000 barrels per day it is currently forecast to produce in the fourth quarter. The expansion would also include a new delayed coking unit to upgrade negative margin high sulphur fuel to distillate gasoline products and an expansion of existing units to enable processing of heavier, more sour grades of crude.

A possible expansion at the Come By Chance refinery would more than double the forecasted crude unit production according to an analysis by the engineering firm SNC Lavalin. File photo by Transcontinental Media

The owner of the Come By Chance oil refinery says it is considering a $2-billion expansion to its operations.

Calgary-based Harvest Energy, which bought the North Atlantic refinery in Come By Chance in 2006, said engineering firm SNC Lavalin has completed an eight-month analysis of potential refinery enhancement opportunities.

The expansion would increase the refinery's crude unit to 190,000 barrels per day, up from the roughly 93,000 barrels per day it is currently forecast to produce in the fourth quarter. The expansion would also include a new delayed coking unit to upgrade negative margin high sulphur fuel to distillate gasoline products and an expansion of existing units to enable processing of heavier, more sour grades of crude.

However, the report states the company will need a partner to invest in the project. "Two billion (dollars) is a big bite, even for a big company," said John Zahary, president and CEO of Harvest Energy.

Zahary said if a partner is found, the expansion would require about five years to complete. The company doesn't have a timeline, but Zahary said interest in the project has increased since Harvest bought the refinery two years ago.

"It's hard to expect partners to commit without knowing what the plan is. That's why we did the analysis," Zahary said.

The news comes after the Newfoundland and Labrador Refining Corp., which hopes to build an oil refinery near Placentia, went into creditor protection in June.

In its report, Harvest said high crude prices and lagging finished product markets have challenged the refinery's financial performance of late. However, the company expects numbers to improve with the completion of its visbreaker unit, scheduled to be implemented in the fall. The company also plans to maximize distillate yields by varying its feedstocks.

david_whalen@hotmail.com

Organizations: Harvest Energy, SNC Lavalin, Newfoundland and Labrador Refining

Geographic location: Chance, Placentia

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