Decision on Canadian Refinery Expansion Expected Soon

Reuters, September 27, 2019

Canadian officials will decide in coming days whether to grant environmental approval for expansion and upgrades at the North Atlantic Refining-owned refinery in Come-by-Chance, the Department of Municipal Affairs and Environment in Newfoundland and Labrador said on Wednesday.

The expansion, if approved, would increase output at the 130,000 barrels per day (bpd) refinery to 162,000 bpd. That would allow the refinery to process more light, sweet crude oil as new maritime rules governing sulfur content in fuel go into effect beginning next year.

A decision was due by Sept. 15, but a ministry spokeswoman said the environmental assessment process was still going on.

New regulations, known as IMO 2020, will restrict ocean-going vessels from using fuel with more than 0.5% sulfur content, down from the current 3.5%. It is expected to boost demand for lighter crude oil that has less sulfur. 

The upgrades will allow the Come-by-Chance refinery to cut its energy consumption for its crude unit and the complex overall, and reduce flaring, according to the project registration.

The refinery is also considering the addition of a delayed coker, used to break down residual oil into coker gas oil and petroleum coke. A decision on the delayed coker is also anticipated in coming days. The coker project will include a C$450 to C$500 million ($339 million to $377 million) investment in the physical plant, plus C$100 million in new working capital, and will lead to an approximate 40 percent reduction in sulfur dioxide emissions across the refinery. 

NARL’s investment in Come-by-Chance comes at a time when refining capacity on the east coast of North America has been declining.

Philadelphia Energy Solutions’ 335,000-bpd refinery was shut after a massive fire in June, and in February, Reuters reported that Delta Air Lines plans to sell its 185,000-bpd oil refinery in Trainer, Pennsylvania.

(Reporting by Laura Sanicola; Editing by Sonya Hepinstall)


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