Newfoundland’s only refinery is shutting down, the first North American fuel maker to be idled as the coronavirus outbreak crushes demand worldwide.
North Atlantic Refining Ltd. will idle the Come by Chance refinery,
VOCM radio reported on its website, citing Glenn Nolan, the president of
United Steelworkers Local 9316. The plant could be shut for two to five
months, Nolan said, according to the report.
North Atlantic, the union and Nolan didn’t respond to emails seeking
comment outside of normal working hours. The 130,000 barrel-a-day
refinery supplies fuel to eastern Canadian markets and the U.S. East
Coast.
While this is the first plant in the region to shut, refineries
across the U.S. and Canada are cutting back as the gasoline and jet fuel
markets seize up. Measures to slow the spread of coronavirus may result
in an unprecedented plunge in fuel demand, with estimates that global
consumption is shrinking by 20% or more.
U.S. government data show that the amount of refined products
supplied to the market fell by more than 2 million barrels a day in the
week ended March 20. With coronavirus cases in the U.S. on the rise
since then, and more parts of the country shutting down businesses and
limiting travel, consumption has likely slid further.
Valero Energy Corp. has reduced processing rates across about half of
its refineries, and Phillips 66 said many of its refineries are near
minimum rates. Suncor Energy Inc. said it’s adjusting its refinery
utilization. With refineries using less crude, the oil market is
starting to seize up, with at least one pipeline asking producers to
reduce output.
Refineries globally have been cutting back activity. Last week,
Gruppo API SpA indefinitely stopped its Falconara facility in Italy
until fuel demand recovers. The nation’s fuel consumption has declined
by about 85%, a spokesman for the company said, citing a union of retail
gas stations. Meanwhile, huge refineries across Asia are cutting back
as billions of people stay home.
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