Chevron Canada storage and distribution facility located at the north foot of Willingdon Avenue in Burnaby, B.C., on Wednesday February 19, 2014, as seen from a National Aerial Surveillance Program flight.DARRYL DYCK/The Canadian Press
Chevron Corp. is gauging interest among would-be buyers for its British Columbia refinery, a plant that supplies about a quarter of the province's fuel, as the company copes with the oil-industry downturn.
The California-based oil major has begun the process of inviting bids after it received indications of interest in the Burnaby plant, which it has operated in the Lower Mainland location since the 1930s.
"We are open to changing market conditions, and this expression-of-interest process allows us to test the broader market value of these assets," Chevron Canada spokesman Adrien Byrne said in an interview. "It's very early in the process. As we go through this process, potential bidders will have access to a data room."
The company's service station and commercial cardlock business would be part of any deal, Mr. Byrne said. There is no timeline set to complete a sale, he said.
It is not known what such a plant, considered small by world standards at 55,000 barrels a day, would fetch in sale proceeds.
The timing is notable, as it comes before a federal decision on whether to approve Kinder Morgan Canada's expansion of the Trans Mountain oil pipeline. The refinery is currently supplied with crude oil from Alberta via the existing line, which moves about 300,000 barrels a day. It also gets crude by rail.
Trans Mountain's current capacity has often been fully spoken for as shippers seek to get crude to the West Coast. Up to 50,000 barrels a day of capacity has been spoken for by companies that export crude to markets in Asian and elsewhere.
Chevron has at times struggled to get its hoped-for volumes on Trans Mountain – especially when pipelines to the U.S. are booked up, and had applied to the National Energy Board to get preferential access. But its application was denied. An expanded conduit would likely ease any supply worries for the plant.
Last month, the board approved Trans Mountain's $6.8-billion expansion, which would triple its capacity. The federal cabinet must now decide on whether to accept the NEB's decision.
Chevron Canada owns 138 B.C. service stations and has interests in another 41 Chevron-branded outlets owned by marketers in the province.
The company's lubricants business and its interest in the stalled Kitimat liquefied natural gas project would not be part of any sale, Mr. Byrne said.
Jeffrey Jones
Brent Jang