Nfld. & Labrador

Come By Chance refinery stopping production due to COVID-19, economic concerns

The North Atlantic refinery in Come By Chance will remain shut down until it is "safe and economically feasible" to restart.

The refinery supplies propane, jet fuel to N.L.

The North Atlantic refinery in Come By Chance can process 130,000 barrels of oil each day. The facility began operations in the mid-1970s, and has changed hands five times. (Bruce Tilley/CBC)

The North Atlantic refinery in Come By Chance is the latest major industrial site in Newfoundland and Labrador to ramp down production in the name of safety, and economics.

But Premier Dwight Ball believes the province's fuel needs will continue to be met.

"There is inventory available to support them through this time," Ball told reporters during his daily briefing Monday.

Ball was referring to propane and jet fuel, 100 per cent of which is supplied by North Atlantic to the provincial marketplace.

North Atlantic is also a big supplier of gasoline, diesel fuel and home heating fuel, and "there is substantial inventory and we think those supplies can be maintained," said Ball.

In the meantime, the premier said government officials are working with other supplies "to make sure inventories are appropriate to see us through this time."

'We have a lot of people that are nervous'

The decision was made Sunday to stop refining new products and instead shift the refinery into maintenance mode.

"While we have no cases of COVID-19 at the refinery, our actions are consistent with the advice of public health officials to further prevent the spread of the COVID-19 virus," wrote chief operations officer Jette Enevoldsen in a statement.

"We have a lot of people that are nervous," added Glenn Nolan, president of United Steelworkers Local 9316, the union that represents some 340 workers at the refinery. Nolan said the total workforce, including contractors and managers, is closer to 500.

He said the union supports the decision to idle the refinery, and said the closure could last anywhere from two to five months.

"I feel it's unfortunate, but I agree with the company on the safety of the workers. Economics are not good either," said Nolan.

North Atlantic will keep a reduced workforce at the site to maintain equipment, including storage tanks holding a large reserve of oil and gas.

Enevoldsen said the supply of products to North Atlantic's Orange Stores in the province will not stop.

The oil refinery at Come By Chance accounts for between five and eight per cent of the gross domestic product of Newfoundland and Labrador, according to the company. (Bruce Tilley/CBC)

As for how long the shutdown will last, Enevoldsen said it will continue until it is "safe and economically feasible" to restart.

The refinery produces between 115,000 to 130,000 barrels of oil per day, with most of its products exported to the northeastern United States.

The price of oil has taken a steep dive in recent weeks, with Brent crude trading below $23 US as of Monday afternoon.

Gasoline prices in Newfoundland and Labrador have also gone off a cliff, reaching the lowest point since 2008.

Hundreds of workers were also sent home from both the Muskrat Falls and Voisey's Bay sites in Labrador in mid-March to help prevent the spread of COVID-19.

Husky Energy has also suspended major construction on the West White Rose project, affecting hundreds more workers.

Read more from CBC Newfoundland and Labrador

With files from Terry Roberts and Ryan Cooke