N.L.'s Come By Chance oil refinery sold to Texas company to produce renewable fuels
An idled oil refinery in the town of Come By Chance, N.L., has new owners and a planned new life producing renewable diesel and sustainable aviation fuel beginning in mid-2022.
The Newfoundland and Labrador government announced Tuesday that an agreement had been reached in the sale of the refinery to Cresta Fund Management, a Texas-based equity firm. Cresta will acquire a majority interest in the facility, and it will be rebranded as Braya Renewable Fuels, the government said.
"This is a positive step as the province itself looks to transition into a greener economy," Premier Andrew Furey told reporters in St. John's.
Cresta is purchasing the facility from New York-based investment firm Silverpeak, which will maintain a minority interest in the refinery, officials said. Silverpeak is the parent company of North Atlantic Refining Ltd., the company that had been operating the refinery. The companies would not say how much the deal was worth.
The government said Cresta plans to be producing about 14,000 barrels a day of "sustainable aviation fuel and renewable diesel" at the facility by mid-2022, with an aim to eventually double that output. The deal includes a commitment from the owners to maintain employment levels equivalent to at least 200 full-time jobs, and to ensure the island of Newfoundland always has fuel.
The Come By Chance refinery has been a source of uncertainty for both the provincial government and the facility's hundreds of workers since its operations were suspended in March 2020. Two previous efforts to purchase the facility fell through before Cresta came aboard.
At its peak, the refinery processed about 130,000 barrels of oil a day, and provided the island of Newfoundland with the vast majority of its fuel. Since it was idled last spring, North Atlantic Refining Ltd.'s marketing arm, NARL Marketing, has been importing all of Newfoundland's fuel.
That arrangement will continue and is part of the conditions of the sale, with Silverpeak remaining the controlling entity of NARL Marketing.
As an oil-processing refinery, the facility was among Canada's top 40 emitters of greenhouse gases in 2019, according to data from the federal Greenhouse Gas Reporting Program. With the switch to renewable fuels, those emissions will be go down "quite substantially," said Jim Stump, a Cresta representative who was also in St. John's for Tuesday's announcement, though he did not provide exact details.
"Mainly because there's fewer pieces of equipment operating to produce diesel for now," Stump told reporters. "And also because the contaminants that come in with crude oil, specifically sulphur and nitrogen, don't exist to much extent at all in our renewable feed stocks."
Stump said renewable diesel is "molecularly identical" to regular diesel fuel, but made from raw plant or animal byproduct material. "The idea is the plant grew, consumed (carbon dioxide) from the air, and then when it's converted to fuel and burned, it releases CO2 back into the air but it's a balance," he said. "So that's why it's renewable."
Canola, for example, is a possible source of raw material for renewable diesel that Cresta is "really excited about," he said. Other sources include soybean oil or beef tallow.
At the moment, there is no Newfoundland-based source for these feed stocks, but the promise of canola could be "good for farmers in Saskatchewan," said Silverpeak partner Kaushik Amin, who was also in St. John's for Tuesday's announcement.
The deal also includes an indemnity clause good until 2031 that puts the province on the hook to cover up to $180 million in cleanup costs for any environmental contamination at the site that may have existed before Cresta's purchase of the plant.
An environmental assessment of the site must also be completed within 18 months of Cresta's acquisition of the site. When asked if the company would commit to making that assessment public, Amin said Cresta would comply with applicable regulations.
"Beyond that, we're a private company, so we have to make sure that everybody respects the private nature of the company," he said.
This report by The Canadian Press was first published Nov. 30, 2021.
CTVNews.ca Top Stories
Bodies found by U.S. authorities searching for missing B.C. kayakers
United States authorities who have been searching for a pair of missing kayakers from British Columbia since the weekend have recovered two bodies in the nearby San Juan Islands of Washington state.
Amid concerns over 'collateral damage' Trudeau, Freeland defend capital gains tax change
Facing pushback from physicians and businesspeople over the coming increase to the capital gains inclusion rate, Prime Minister Justin Trudeau and his deputy Chrystia Freeland are standing by their plan to target Canada's highest earners.
'It's discriminatory': Individuals refused entry to Ontario legislature for wearing keffiyeh
Individuals being barred from entering Ontario’s legislature while wearing a keffiyeh say the garment is part of their cultural identity— and the only ones making it political are the politicians banning it.
BREAKING Police will not be charged in death of Indigenous man in B.C., mother says
Three Mounties in British Columbia will not face charges in the killing of a 38-year-old Indigenous man on Vancouver Island in 2021, according to the man's mother.
Douglas DC-4 plane with 2 people on board crashes into river outside Fairbanks, Alaska
A Douglas C-54 Skymaster airplane crashed into the Tanana River near Fairbanks on Tuesday, Alaska State Troopers said.
Tom Mulcair: Park littered with trash after 'pilot project' is perfect symbol of Trudeau governance
Former NDP leader Tom Mulcair says that what's happening now in a trash-littered federal park in Quebec is a perfect metaphor for how the Trudeau government runs things.
'It's just so hard to let it go': Umar Zameer still haunted by death of Toronto police officer
“It's just so hard to let it go. I mean, everyone is telling me, ‘you have to move on,’ but I know someone is not here [anymore]. So I don't know how I will move on." That’s what Umar Zameer, the man recently acquitted in the death of a Toronto police officer, told CTV News Toronto in a sit-down interview on Tuesday.
NASA hears from Voyager 1, the most distant spacecraft from Earth, after months of quiet
NASA has finally heard back from Voyager 1 again in a way that makes sense. The most distant spacecraft from Earth hadn't sent home any understandable data since last November.
Saskatchewan households will continue to receive carbon tax rebate: Trudeau
Households in Saskatchewan will continue to receive Canada Carbon Rebate payments, despite the province refusing to remit the federal carbon price on natural gas, Prime Minister Justin Trudeau said Tuesday.