Vitol S.A. Acquires Come-by-Chance Refinery in Canada

Dutch trading company Vitol S.A. has reached an agreement to purchase the Come-by-Chance refinery in Canada from Newfoundland Processing Ltd., marking the end of a nearly two-year negotiation process. The sale has been finalized, with the transfer of ownership set to occur on the agreed date. The refinery, which has been shut down since April, will reportedly resume operations in September, restarting its 105,000 barrels per day (b/d) production.

The sale price of the refinery remains undisclosed, although it is understood that the debt accumulated by Newfoundland Processing was a significant factor in the delay of the sale. The company had to negotiate separate agreements with multiple creditors, including J. Aron & Co., General Electric Capital Corp., and numerous other parties, before the sale could be finalized.

The Come-by-Chance refinery was originally built to supply the U.S. Northeast market with gasoline, which it did until its closure in April. One trader suggested that the refinery's return to operation could have a significant impact on the market, particularly if legislation or regulation prevents reformulated gasoline from being imported from Venezuela and Brazil next year.

Despite the uncertainty surrounding the refinery's future, it appears that no buyers were dependent solely on the Come-by-Chance refinery for their supply needs. Gulf Oil L.P., which had some connections to the refinery through the Haseotes family, was able to find alternative suppliers and was not reliant on the imports from the Come-by-Chance refinery.

Key Takeaways:

• Vitol S.A. has acquired the Come-by-Chance refinery in Canada from Newfoundland Processing Ltd. after nearly two years of negotiations.
• The sale has been finalized, with the transfer of ownership set to occur on the agreed date.
• The refinery, which has been shut down since April, is expected to resume operations in September at a production rate of 105,000 b/d.
• The sale price remains undisclosed, although it is understood that the debt accumulated by Newfoundland Processing was a significant factor in the delay of the sale.
• The company had to negotiate separate agreements with multiple creditors, including J. Aron & Co., General Electric Capital Corp., and numerous other parties.
• The Come-by-Chance refinery was originally built to supply the U.S. Northeast market with gasoline.
• The refinery's return to operation could have a significant impact on the market, particularly if legislation or regulation prevents reformulated gasoline from being imported from Venezuela and Brazil next year.

Statistics:

• The Come-by-Chance refinery has a production capacity of 105,000 b/d.
• The debt accumulated by Newfoundland Processing was approximately $80 million to J. Aron.
• Vitol S.A. may be owed $30 million to $50 million by Newfoundland Processing.
• 118 lawsuits had been filed against Newfoundland Processing by early August.

Sources:

• "Vitol to Buy Come-by-Chance Refinery in Canada" by Bloomberg
• "Come-by-Chance refinery sale finalized" by The Telegram
• "Newfoundland Processing's debt woes mount" by The Canadian Press
• "Vitol to Buy Come-by-Chance Refinery" by Reuters