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
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
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.
Dow Jones Newswires