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Saturday, Sep 18th, 2021

Province in talks to extend Come By Chance refinery’s financial lifeline

In another sign that that a restart is increasingly likely, the provincial government has confirmed that talks are ongoing to extend a financial lifeline for the idled Come By Chance refinery as negotiations for a possible sale and conversion to a biofuel plant continue.

A spokesperson for the Department of Industry, Energy and Technology said in a statement to CBC News on Friday that discussions with North Atlantic Refining Limited Partnership (NARL) for “additional financial support” are taking place.

“There is no agreement at this time; however, discussions are ongoing,” Tansy Mundon wrote in an email.

Mundon said the refinery owners have requested more public money “to aid with their current purchase/sale discussions for the refinery.”

No job losses next week

In January, the provincial government announced $16.6 million in public money for NARL to keep the complex facility in idle mode while the owners searched for a buyer.

As part of that deal, the company was required to increase its staffing levels to 200 full-time equivalent workers — about a third of its normal complement — with the government covering 75 per cent of labour costs.

That financing arrangement expires Wednesday, but now there’s word the workers will not lose their jobs next week.

“It is the province’s understanding that NARL will continue with its current level of employment while these discussions continue,” Mundon wrote.

Industry, Energy and Technology Minister Andrew Parsons was not available for an interview Friday.

But for the union representing workers at the refinery, it’s a positive development.

“A deal is close to getting done,” said Glenn Nolan, president of United Steelworkers Local 9316.

Renewable diesel fuel

NARL is owned by New York-based investment management firm Silverpeak, which has been in negotiations with a Texas-based private equity firm called Cresta Fund Management for a possible sale of the 130,000-barrel-per-day refinery in Placentia Bay.

If a sale is approved, Nolan said Cresta has plans to convert the refinery into renewable fuel production, making what’s being called renewable, or low sulphur, diesel out of used cooking oil and other waste products.

Such a plan would likely mean the end of locally refined gasoline, propane and other transportation and heating fuels, and likely fewer jobs.

But it’s better than the alternative, said Nolan, which is permanent closure.

“Biofuel is the future, and the world is changing,” said Nolan.

According to media reports, some massive oil refineries in the United States are being converted into biofuel plants as part of a worldwide energy transition to lower carbon emissions and fight climate change.

In advance of a potential sale to Cresta, union members voted overwhelmingly this month in support of a new collective agreement.

The new labour agreement will be activated if a sale to Cresta is formalized by Aug. 15, but Nolan said there is room for an extension if needed.

The refinery stopped producing fuels 14 months ago, with the owners saying the operation was no longer financially viable because of the market collapse created by the global pandemic.

As for the nearly $17 million in taxpayers’ money committed to NARL in January, Mundon said it’s expected the money will be exhausted by the end of this month.

Source: CBC | This text was excerpted from the media outlet cited on June 25, 2021 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.