Exclusive: Private equity firm bids for Come-by-Chance refinery, with plans to convert to renewable fuels

By Laura Sanicola

(Reuters) - Private equity firm Cresta Fund Management has offered to buy a majority stake in North Atlantic Refining, owner of the idled Canadian Come-by-Chance refinery, according to a letter reviewed by Reuters.

The Dallas-based firm said in a letter dated Jan. 22 it would look to convert the refinery to renewable fuel production. The Newfoundland refinery has been shut since March, one of numerous refineries across the United States and Canada that have halted operations due to coronavirus-induced demand destruction.

Several refiners since then have announced plans to convert their operations to renewable fuels production to remain viable as both nations try to reduce emissions.

Canada's Clean Fuel Standard (CFS) will require carbon-intensity reduction targets set for each fuel starting in 2022 and is projected to increase renewable fuel demand.

Cresta Fund Management declined to comment. North Atlantic Refining could not be reached for comment.

The refinery, operated by North Atlantic Refinery Ltd (NARL) and New York-based investment firm Silverpeak, is actively searching for a new owner.

"We have a track record of successfully acquiring similar businesses and have the market knowledge and resources necessary to smooth the diligence process and ensure a successful transition," the letter said.

In January, the Canadian province of Newfoundland and Labrador agreed to give NARL a total of C$16.6 million ($13 million) to keep the 135,000 barrel-per-day plant idled while the owner seeks a new capital partner.

Come-by-Chance has been looking for a new owner since Irving Oil backed away from a purchase and share agreement in October.

The trading unit of Russia's Lukoil plans to remove crude oil it has stored at Come-by-Chance, Reuters reported last week. Lukoil's Litasco unit is its primary crude supplier.

(Reporting by Laura Sanicola; Editing by Chris Reese)