US merchant bank to buy Newfoundland refinery

Sept. 8, 2014
Harvest Operations Corp., a wholly owned subsidiary of Korea National Oil Corp., has agreed to sell its 115,000-b/d refinery in Come-by-Chance, Newf., to New York-based merchant banker SilverRange Financial Partners LLC.

Harvest Operations Corp., a wholly owned subsidiary of Korea National Oil Corp., has agreed to sell its 115,000-b/d refinery in Come-by-Chance, Newf., to New York-based merchant banker SilverRange Financial Partners LLC.

The sale includes both the refinery as well as 100% ownership in Newfoundland-based subsidiary North Atlantic Refining Ltd.’s (NARL) retail and marketing operations, Harvest said.

As part of the agreement, SilverRange also will purchase existing inventories of crude oil and refined products, as well as NARL’s North Atlantic-branded marketing, marine, and home heating affiliate businesses, Harvest said.

Harvest will remain focused on its Canadian upstream business, which includes maintaining and growing its operations in western Canada, according to John Wearing, Harvest’s chief operating officer.

“At the same time, the Come-by-Chance refinery will remain an integral part of the local economy in Newfoundland and an important component of the energy supply chain on the Atlantic seaboard,” Wearing added.

Come-by-Chance’s strategic location along shipping routes with access to US and European petroleum markets as well as the refinery’s processing technology makes the opportunity an attractive one for SilverRange, according to partner Harsh Rameshwar.

“[The refinery’s] clean-fuel technology enables [it] to produce low-sulfur, clean fuels, providing flexibility to refine crudes from many parts of the world,” Rameshwar said.

SilverRange, which already has entered into a multiyear feedstock supply and product off-take agreement with an unidentified global oil firm, also has committed to capital investment projects at Come-by-Chance, including reducing the refinery’s overall sulfur dioxide emissions and making improvements to an associated tank farm.

While terms of the sale were not disclosed, the companies said they expect the transaction to close during this year’s fourth quarter.