BP Joins Irving Oil in Proposed Eider Rock Refinery Project
International oil major BP and regional refiner and marketer Irving Oil have entered into a Memorandum of Understanding to work together on the next phase of engineering, design, and feasibility for the proposed Eider Rock refinery in Saint John, New Brunswick, Canada.
BP will contribute US$40 million as its share of funding for this stage of the study and the two companies will also investigate the possibility of forming a joint venture to build the refinery should they decide to proceed.
Irving Oil conducted initial feasibility work and informal public consultation in 2006, and has been engaged since January 2007 in permitting, public consultation, and engineering design for the proposed 300,000 barrel per day refinery. The refinery would be situated close to Irving Oil’s existing 300,000 barrel per day refinery and the existing Irving Canaport deepwater crude oil terminal which receives VLCC cargoes of crude oil and is located 65 miles (105 km) from the US border.
This next phase of engineering, design and feasibility work, combined with ongoing permitting and community engagement activities represents over US$100 million of investment over the next 12-15 months.
“We are excited that a company of BP’s calibre sees the potential in our region and in this project to meet the need for a reliable and secure supply of refined products for the north east,” said Kenneth Irving, president of Irving Oil. “BP brings international expertise and crude supply, but what really drew us to partner with BP was the cultural fit with our company and our shared belief that the world has changed when it comes to matters that relate to environmental performance and security of supply. Our shared belief on the future of energy will increase the potential of this project.”
“This refinery project is of great interest to BP because of its ideal location close to the markets of the north eastern US where product supplies are increasingly in deficit,” said Iain Conn, chief executive of BP’s refining and marketing business. “BP is keen to develop projects which enhance the energy security of Canada and the US. Irving Oil has a well-deserved leading reputation in refining for the east coast. The two companies have a good track record of working together and we are pleased to be jointly undertaking the feasibility work on this exciting opportunity.”
“This project would support the further development of the New Brunswick energy hub and the refining industry on the East Coast,” said Kevin Scott, Irving Oil’s director of refining growth. “We will continue to follow the rigourous permitting process outlined by our Federal and Provincial Governments, and we will continue to consult our community to ensure that, if the project proceeds, it will be one the community can be proud of.”
A final investment decision is not expected before 2009 and, although the final costings will only be clear once all the detailed engineering and design work is completed, the refinery is expected to cost at least US$7 billion. If permitting approval is received and an investment decision is made to proceed, site preparation would begin in 2010, and full scale construction would begin in 2011 with start-up expected in 2015. Irving Oil has committed to using the best available proven technology to develop a refinery with leading environmental performance and economic efficiency.
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