A new owner has been found for North Atlantic Refining, the only refinery in Newfoundland and Labrador.

Calgary-based Harvest Energy Trust said Wednesday it has purchased the refinery and related assets for $1.6 billion.

The North Atlantic refinery in Come By Chance has annual exports exceeding $2 billion.
(CBC)

Swiss-based Vitol SA put the refinery located in the Placentia Bay community of Come By Chance on the market in December.

One of the world's largest oil traders, Vitol said it no longer wanted to continue in the refining business. The North Atlantic facility was the only refinery it owned. 

Harvest Energy president John Zahary said the purchase will make the company more stable for its investors.

North Atlantic, which refines about 115,000 barrels of oil per day, has been working on an expansion program in recent months. Last December, Vitol said another $600 million to $800 million would have to be invested for the refinery to compete with leading refineries on the global market.

Zahary said those expansion options are still on the table.

"We like the projects that have been identified by management. We need to spend some time looking at those, but you know, that's part of the appeal of this organization and its asset base," said Zahary.

North Atlantic president Gunther Baumgartner said the refinery will continue on a business-as-usual basis.

Vitol, for instance, will still supply the refinery with crude oil exported from sources such as Russia and the Middle East.

"There's going to be a continued working relationship between both Vitol and the new buyers, in the supply of crude and products, so there'll be an ongoing business relationship," Baumgartner said.

Vitol has said it spent almost $600 million on upgrades since it bought the refinery in 1994.

Harvest Energy Trust — which trades on the Toronto Stock Exchange — said the North Atlantic purchase will improve cash flow and aid in vertically integrating the company's assets.

North Atlantic has exports exceeding $2 billion per year.

The Come By Chance refinery had a troubled start, with its failed launch in the early 1970s. It was later revived in the 1980s and has been profitable since.