Canada-based oil refinery operator Irving Oil on Tuesday said it has terminated an agreement for the purchase of North Atlantic Refinery Limited, the company said in a statement on its website.
Irving had agreed to buy the owner of the idled 135,000 barrels per day Come-by-Chance refinery in Newfoundland, for an undisclosed price in May.
According to industry sources, Irving walked away from the purchase and share agreement shortly before it was set to close in mid-October.
“North Atlantic is actively looking for alternate buyer, but the market is very challenging,” said a source familiar with the matter.
Workers are expected to be told at an all-staff meeting on Tuesday morning.
Refining margins have been weighed down by lower processing rates due to an oversupply of distillate stocks, which include jet fuel. The crack spread – the difference between crude and fuel – is currently hovering around $10.50 a barrel.
The Come-by-Chance refinery was the first to close in North America as refiners worldwide began to scale back to adjust to a sudden demand slump due to the coronavirus pandemic.
It supplied products to major harbors on the U.S. East Coast including New York and Boston.
The plant has been idled since early April, but Irving indicated it would restart the plant following the close of the sale.
The refinery was nearly sold in 2018, with Irving Oil as the leading bidder, but the two former oil traders at the helm of the refinery disagreed on the sale price and the sale subsequently fell apart.29dk2902l