The oil refinery at Come By Chance has been sold to SilverRange Financial Partners LLC of New York. The sale includes the North Atlantic Refinery Ltd. retail business.
Speculation had been ongoing for nearly a year over the future of the 115,000 barrel-per-day refinery, owned by Harvest Operations Corp., under the Korea National Oil Corporation (KNOC).
Terms of the sale were not disclosed.
A joint statement released on the sale notes SilverRange has offtake agreements for oil from the refinery, and the provincial government worked closely to assure existing employment and economic benefits would be maintained.
“We are very pleased to announce the sale of North Atlantic Refining Ltd., our Newfoundland-based subsidiary. Given Harvest’s focus on investment in Canada’s upstream business, we remain committed to maintaining and growing our operations in Western Canada,” said John Wearing, Harvest’s chief operating officer, in a statement.
“At the same time, the Come By Chance refinery will remain an integral part of the local economy in Newfoundland and an important component of the energy supply chain on the Atlantic seaboard.”
The sale includes 53 North Atlantic gas stations, including 14 Orangestore branded locations.
Buyer says refinery technology a draw
“This agreement provides a unique opportunity for SilverRange. (North Atlantic) is strategically located along Atlantic crude oil shipping routes and provides access to petroleum markets in Europe and the U.S. Eastern seaboard. Its clean fuel technology enables the refinery to produce low-sulphur, clean fuels, providing flexibility to refine crudes from many parts of the world. In addition, the marketing business is a unique and attractive stable margin asset,” said Harsh Rameshwar of SilverRange.
“We look forward to becoming a part of the Newfoundland community.”
Natural Resources Minister Derrick Dalley has welcomed the refinery’s new owners.
“The successful agreement for the sale of North Atlantic Refining Ltd. is good news for the people of the province, particularly those who make their living from the oil refinery in Come By Chance as well as the other operations throughout the province,” he said, in the same statement.
Workers at the refinery were gathered together and informed of the sale this morning.
“We’re very excited about it. It’s been a long year, but we’ve worked with everybody, the union has, and it’s a win-win situation for everybody,” said Perry Feltham, an occupational health and safety representative with the union local, United Steelworkers 9316, when contacted by The Telegram.
Deal shatters predictions
Come by Chance Mayor Joan Cleary is also celebrating the news. “I’m ecstatic actually,” she said.
The refinery’s history includes ups and downs. Construction was finished under in Shaheen Resources in 1973. That company went bankrupt in 1976, leading to a decade where the facility was not operating.
Newfoundland Processing Ltd. restarted the operation, maintaining it until a 1994 sale to the Vitol Refining Group. It was run by Vitol until 2006 and then sold to Harvest Energy. Harvest’s operation was bought by the KNOC in 2009.
Significant investments have been made at the refinery over the years, including hundreds of millions of dollars worth of upgrades under KNOC.
That said, recent shutdowns of refining operations in Canada — specifically the change of the Imperial Oil refinery in Halifax to a terminal station — paired with a consultant expressing little optimism over the refinery’s future, led to speculation the refinery might shut down.
The joint statement issued today on the sale, set to close in the fourth quarter, notes SilverRange has committed to investing in new upgrades at the facility.
“SilverRange will be reducing overall sulphur dioxide emissions at the refinery and undertaking a capital investment program at the tank farm,” it states.
As part of the deal, the provincial government has provided assurances “SilverRange’s acquiring entity will not be responsible for any pre-existing environmental liabilities.”