The Newfoundland and Labrador government entered into a $16.6 million funding agreement with North Atlantic Refinery Limited to keep its 135,000 barrels per day Come-by-Chance plant idled as the owner seeks a new capital partner, the government said on Friday.
The funding will cover 75% of eligible labor costs of refinery employees and 50% of eligible non-labor costs in Newfoundland and Labrador to keep the refinery warm in case of a future restart, according to a release from the government.
“Part of this agreement includes a commitment by NARL LP and its owners that it will continue its ongoing buyer/investor search for the refinery,” said Andrew Parsons, minister of industry, energy and technology.
The plant has been idle since early April, with about 100 workers operating the plant, down from the 400 full-time employees the refinery employed prior to the shutdown.
Approximately 200 workers will be employed at the facility as a result of the agreement.
The company was not available for comment.
The refiner has been looking for a new owner after Irving Oil backed away from a purchase and share agreement in October shortly before it was set to close on acquiring the company.
At that time, Parsons said it was too soon for the government to consider purchasing the refinery.
It 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.
The company also received interest from U.S.-based energy company Origin International in restarting fuel processing there in “a more environmentally sustainable model.”
Come-by-Chance was the first North American refinery to close as fuel demand collapsed during the coronavirus pandemic.
It supplied major U.S. East Coast harbors including New York and Boston. 29dk2902l