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New deal set for Atlantic refinery

Prospects looking brighter following Irving departure 

UnknownWorkers at North Atlantic Refining Ltd. site at Come By Chance, N.L. may see their luck change. The refinery had been set to sell to Irving Oil when the deal collapsed this October. Now U.S.-based Origin International, a Maryland company involved in oil recycling, has made a formal offer to purchase the assets of the company that include the refinery.
The deal, between Silverpeak, owner of North Atlantic Refining, and Origin International, was announced last week. Terms are still undefined as the two sides hammer out details. Expectations are that once the ink dries, Origin International will ramp refinery production back to full capacity with a full complement of workers.
As little as two weeks ago, Origin International CEO Nicholas Myerson asked that the facility be kept on ‘warm idle’ to make the transition to new ownership an easier task. “Origin is finalizing a plan that would have all employees back to work immediately after a transaction, with a restart for the plant in the second quarter of next year,” the company said at the time.
The North Atlantic Refining facility at Come By Chance employs 500 workers. The plant refines 135,000 bbl. per day of crude and contributes as much as 5% of the GDP of Newfoundland and Labrador.
OCTANE editor Kelly Gray can be reached a Kgray@ensembleiq.com

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Irving buys Come By Chance refinery

Move enhances company’s market edge

UnknownIrving Oil has announced the completion of its acquisition of North Atlantic Refining Corp. from U.S.-based investment firm Silverpeak. The deal, with undisclosed financial terms, includes a 135,000-barrels-per-day (bpd) refinery located at Come By Chance, NL, as well as a network of retail sites and other marketing assets.

Unknown-1The retail locations include nearly 100 company-owned and dealer sites and cardlocks, including the Orangestore chain of 24 convenience stores. North Atlantic Refining Corp has been a well-known major player in the province’s stove oil, gasoline, and propane trade since 1950.

The Newfoundland refinery is one that comes with a storied past of bankruptcies and business losses. Bought and sold a number of times since it went into service in the early 1970s, the facility was built to refine light crude and takes about 70% of its inputs from sources in the U.S. Silverpeak had recently invested $400 million to bring capacity up from about 100,000 bpd to 135,000bpd. Proposed is a further upgrade that would increase output to more than 165,000bbd and add a new coker that would allow a heavier grade of crude to be refined.

This initiative that is now in Irving’s court would bode well for the company given that they just arranged to ‘import’ Albertan heavy bitumen via tankers through the Panama Canal route. As well, Newfoundland and Labrador offshore wells also produce heavier crude and with an upgrade, the Come By Chance facility could finally refine the locally sourced heavy oil.

The Come By Chance refinery and the North Atlantic Refining Corp. convenience retail and fuel network in Newfoundland and Labrador is a strategic fit for Irving. With the closing of the Silverpoint deal, Irving will now operate the only two refineries in the Atlantic region. The other is Canada’s largest refinery at 320,000bbd and is located at St. John, NB. These facilities are married to another refinery in Cork, Ireland (71,000bbd). Together this recent agreement gives Irving a solid footing in fuel refining in the North Atlantic basin as well as an uptick in retail locations that create a greater market presence for this Halifax-based family business.

Kgray@ensembleiq.com