By CAROLYN KING
TORONTO -- Canadian integrated energy company Imperial Oil said Wednesday that it will convert its crude-oil refinery in Dartmouth, Nova Scotia, into a terminal operation after failing to find a buyer willing to operate the refinery.
The Calgary, Alberta-based company began shopping the refinery around in May of last year, saying competition in the area had led to lower-than-expected financial returns from the operation.
In a statement Wednesday, Imperial Oil said the failure to find a buyer illustrates "the challenges of operating a refinery of Dartmouth's scale in the competitive conditions of the Atlantic Basin market." It expects to record an after-tax charge of up to about 280 million Canadian dollars ($274 million) in the second quarter in connection with the conversion.
A spokesman for the company, Pius Rolheiser, said that, due to pipeline constraints, the refinery has limited access to lower-priced Western Canadian crude. He said it sources its Brent-priced crude from a variety of sources.
The 95-year-old Dartmouth refinery, which produces a range of products such as gasoline, diesel, jet fuel and home heating fuel, has a throughput capacity of about 88,000 bpd. About 200 employees and 200 contractors work at the refinery and related terminals, the company said.
Mr. Rolheiser said it was "too early" to say if any jobs would be lost.
The company already operates terminal facilities in Dartmouth as well as in four other locations in Atlantic Canada. The spokesman said the Dartmouth operation will serve as the primary terminal in the region, offering storage and distribution for refined petroleum products and serving the Atlantic Canadian market.
Imperial Oil is targeting initial start-up for the converted facilities later this year. Decommissioning surplus facilities will be a multi-year process, it added.
Imperial Oil is controlled by ExxonMobil.
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