SAINT JOHN, N.B. -- BP and Irving Oil said that they will not be moving forward at this time with the proposed second refinery in Saint John, New Brunswick, as a result of global economic and industry conditions. The joint technical and commercial feasibility study that the two companies have been conducting over the last 18 months concluded that the project was not viable at a time of global economic recession and dampening forecasts for petroleum product demand in North America.
"It became clear, particularly over the past year, that the market conditions for refining [image-nocss] have changed since BP and Irving Oil entered this memorandum of understanding," said Iain Conn, CEO of BP's refining and marketing business. "We are, therefore, unable to move forward with an investment of this kind. I appreciate the hard work and collaboration of the project team over the past 18 months. BP has benefitted from the co-operation with Irving Oil and values the relationship we have established."
Kenneth Irving of Fort Reliance, the parent company for Irving Oil, added, "We remain committed to our community, to the self-sufficiency goal, and to the further development of the New Brunswick Energy Hub. We will continue to work hard to maintain the competitiveness of our existing business and to create new investment opportunities by attracting world-scale companies to come to our region."
He added, "When the time is right, we are ready and willing to work together. While this was a difficult decision, timing is everything. No one would benefit from a well conceived but poorly timed investment."
To complete the processes already underway, and to preserve future options in the event that market conditions return to previous levels, Irving Oil will continue with the environmental permitting processes related to the proposed second refinery.
Irving Oil is a privately owned regional refining and marketing company with a history of long-term partnerships and relationships. Irving Oil operates Canada's largest refinery, in Saint John, N.B., which is located 65 miles north of the U.S. border and has reached production rates in excess of 300,000 barrels per day. The refinery exports more than 80% of its production to the United States and accounts for 75% of Canada's gasoline exports to the U.S. and 19% of all U.S. gasoline imports. In 2003, Irving Oil became the first oil company to receive a U.S. Environmental Protection Agency Clean Air Excellence Award, for its clean gasoline.
BP is one of the world's largest oil and gas companies, serving millions of customers every day in more than 100 countries across six continents. BP's activities are exploration and production; refining and marketing; and alternative energy, its low-carbon energy business. Through these business, BP provides fuel for transportation; energy for heat and light; retail services; and petrochemicals products for textiles and packaging.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.