June 18, 2008 at 10:00 pm #3572
Second refinery project hits capital snag
March 14, 2008 – Plans for a second refinery in the province are being affected by a tightening capital market, according to Bloomberg.com.
Design and engineering work will continue, but the estimated $5.0 billion green field project will not proceed until financing is sorted out. According to Bloomberg, Newfoundland and Labrador Refining had planned to fund upwards of half the project with debt. “Effectively, the debt markets are closed at the moment,” Dalton said.
“It’s not a pricing issue, it’s just a general availability issue.” The start of construction “depends very much on when the markets open. We’re not going to start it unless we know we can finish it, that’s for sure.”
The company’s project update, issued Friday, isn’t quite as clear on the financing issue.
In April 2007, NL Refining was seeking at least one financial backer with deep pockets. In January 2007, Bond Papers noted the difficulties likely to come for anyone trying to raise cash for a green field refinery project while at the same time, an expansion project would have considerably less cost and therefore lesser difficulty accessing capital.
By contrast, Harvest Energy announced in February it was considering a $1.0 billion investment to expand capacity at its refinery at Come by Chance.
June 18, 2008 at 10:13 pm #6773
Here was an article post update on 2 – North Atlantic/ Newfoundland & Labrador/ Come-by-Chance Refinery & Coker projects a client of mine asked about, and clairfication is below:
There are 2 refinery & coker projects at Newfoundland / Come by Chance – an existing expansion & new Greenfield/grassroots addition. Articles about trying connect NLRC to CBC existing refinery were either errors or trying to update status on both or indicate locations by referencing existing refinery/dock/ect.
The Refinery/Coker details are:
NARL (North Atlantic Refining Ltd) – Harvest Trust = existing CBC refinery purchased from Vitol & Feasibility by SNC Lavin. Current size is ~ 115MBD with expansion options from +30 MBD up to +155 MBD, which may include coker addition. Harvest expansion is moving forward @ ~$1Billion range.
NLRC (Newfoundland & Labrador Refining Corp) – Altius = grassroots CBC refinery addition going in near existing CBC refinery with Feasibility also by SNC Lavin. Size of competative refinery from SNC was set at 300 MBD for option to export product into Europe. Initially set up MOU with Foster Wheeler for Coker Technology but switched to COP Technology ~at same time did agreement with UOP. Project (and coker agreement) now on hold due to financing issues and price range is $5-7Billion range.
June 20, 2008 at 12:27 pm #6767
<News forward from Jacobs Petcoke folks – Looks like bad news for NLRC project – were looking for Mid East/China Financing due US Financial issues, now they are fighting off Creditors & Bankruptcy – CER>
Altius Minerals Corporation: Newfoundland and Labrador Refining Corporation Seeks Creditor Protection
Friday June 20, 8:29 am ET
ST. JOHN’S, NEWFOUNDLAND AND LABRADOR–(Marketwire – June 20, 2008) – Altius (TSX:ALS – News) has been informed by Newfoundland and Labrador Refining Corporation (“NLRC”), of which Altius is a 39.6% shareholder, that NLRC is seeking creditor protection.
Altius’ investment in NLRC as at June 20th 2008 totals $52.2 million, including $22.1 million in equity and a $30.1 million convertible demand debenture secured by the assets of NLRC.
Altius will assess whether adjustments to the carrying value of this investment is warranted in light of this recent development. There can be no assurance that all or any of Altius’ investment will be recovered.
Altius will provide additional information as it becomes available.
A copy of the NLRC news release is provided below in its entirety.
NEWFOUNDLAND AND LABRADOR REFINING CORPORATION SEEKS CREDITOR PROTECTION
St. John’s, Newfoundland and Labrador Refining Corporation (“NLRC”) announces that it has filed a Notice of Intention to Make a Proposal pursuant to the Bankruptcy and Insolvency Act (“BIA”). This will provide NLRC with a stay of proceedings against actions by creditors while it formulates a proposal for restructuring. This action was necessitated when SNC Lavalin, a contractor providing environmental and engineering services, served NLRC late yesterday with notice of proceedings in the Supreme Court of Newfoundland and Labrador seeking to have NLRC adjudged a bankrupt. NLRC intends to oppose the applications of SNC Lavalin.
NLRC management is currently working with its advisors to determine the optimum method of restructuring, which may include the sale of its assets. A further update will be provided at a later date once key decisions are made.
With the exception of its dispute with SNC Lavalin, NLRC has been in productive discussions with its creditors to resolve and restructure its debt arising from the challenges in sourcing financing due to the deterioration of North American finance markets earlier this year.
NLRC remains encouraged by the economic fundamentals of the proposed project and continues to pursue several potential alternatives to attract financing and/or partners.
For further information about the proposed oil refinery project, please visit the company website at http://www.nlrefining.com or contact our corporate office.
Brian Dalton (Director) or Susan Hollett (Community Inquiries), 1-888-570-3442 – firstname.lastname@example.org / email@example.com
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