Yahoo Finance Come By Chance reduced to a 'tank farm'? The signs are there for just that scenario
There are growing concerns — and signs — that the idled North Atlantic refinery in Come By Chance could be reduced to a storage and distribution terminal for imported fuels, and that could mean a devastating economic blow to Newfoundland and Labrador, as well as to hundreds of workers connected to the industrial site.
Silverpeak, the New York investment management firm that owns the refinery, its marketing division and a chain of North Atlantic service stations, has reserved the name NARL Terminal Inc. with the provincial government's Registry of Companies.
The law firm that represents Silverpeak in this province, Stewart McKelvey, filed a request to reserve the name on Oct. 6. According to online records, that request was approved.
Silverpeak has declined repeated interview requests from CBC News, with a representative writing in an email that "the company has no comment at this time."
But industry sources say that unless a new buyer can be found, it's possible a scenario similar to one that played out in Dartmouth, N.S., seven years ago could be repeated in Come By Chance.
And with Silverpeak taking steps to form a new company that could oversee such a facility, one of the companies interested in buying the refinery is speaking out.
'The conversion of the facility into an import terminal could have unfavourable outcomes for the province and the local community, including permanent job losses, increased fuel prices, and potentially unresolved environmental liabilities.' - Origin International
"The conversion of the facility into an import terminal could have unfavourable outcomes for the province and the local community, including permanent job losses, increased fuel prices, and potentially unresolved environmental liabilities," a representative for Origin International, a U.S.-based private company that specializes in recycling used oil products, told CBC News.
Worst-case scenario
The Imperial Oil refinery in Nova Scotia was closed in 2013, and converted into a marine terminal, requiring only a small fraction of the roughly 400 workers with ties to the refinery.
The union representing most of the workers at NARL Refining Inc., better known as North Atlantic, says outside of a complete shutdown, the downsizing to what's known as a "tank farm" would be a worst-case scenario.
"It would be a big loss of jobs. A huge impact on the economy and the price of fuels here," said Glenn Nolan, president of Local 9316 of the United Steelworkers.
Energy Minister Andrew Parsons said he became aware of the the possible creation of a new company through the media on Thursday, when he was asked about the development by allNewfoundlandLabrador.com.
"The biggest thing I can say is I'm aware, the second thing I can say is it's not a part of any discussions I'm having, and the third thing I can say is obviously I'm not supportive of it," Parsons said during an interview Friday.
The 135,000-barrel-a-day refinery was idled in March, when the COVID-19 pandemic caused a global drop in demand for fuel.
A proposed sale to Irving Oil collapsed in early October without either side offering an explanation, and now at least two companies have expressed interest in a possible acquisition.
Origin International, based in Maryland, issued a statement to CBC News this week saying it plans to reopen the refinery in the second quarter of 2021, and that it will recall all the roughly 500 employees as soon as a deal is inked.
A second company is also showing an interest, but has asked not to be identified, said Parsons.
'Warm idle' mode
While backroom discussions are underway, talk is intensifying about the need to keep the refinery in what's called "warm idle" mode as the winter approaches.
Silverpeak has requested financial assistance from the provincial government to keep the refinery in what's known as a "steady state."
When asked about this on Friday, Parsons said: "We have said at no point are there any options that are off the table."
But he said the primary focus is to help steer the current owner and potential buyers toward a possible deal.
"Most hours of each day are spent with this process," said Parsons.
While the province does not have an ownership in the refinery, it has more than passing interest in what's happening.
The province is responsible for environmental liabilities that existed at the refinery prior to Silverpeak's purchase in November 2014.
An assessment to determine the site's environmental conditions for indemnity coverage is currently ongoing, according to the energy department.
In recent years, the refinery has represented as much as five per cent of the province's economy.
"We have a very significant vested interest in this," Parsons said.
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