Employees leave the Shell Canada refinery in Montreal last January. The company announced Friday it will close the east-end facility and convert it to a distribution centre.Paul Chiasson
Royal Dutch Shell PLC said Friday it has asked Delek US Holdings to restart talks to acquire Shell's Montreal refinery in a last-ditch attempt to keep the plant operating and avoid job losses.
Shell said it will sell the 130,000 barrel a day plant to Delek for the price stated in the offer sheet, which is $150-million to $200-million, if the would-be buyer can conduct a major maintenance run quickly enough and ensure it keeps suppling customers.
Delek, an arm of Israel's Delek Group, would have to respond to its proposal within 48 hours, Shell said. Delek spokesman Noel Ryan declined to comment.
The move comes after hearings before a parliamentary committee in Ottawa this week, during which some lawmakers blasted Shell, saying the oil major did not really want to sell the refinery.
The company has said it wants to halt refinery operations and convert the site into a fuel terminal, but extended the search for buyers for nearly six months at the urging of the Quebec government, in an effort to save about 500 jobs.
"We thought we would extend it one last time and see if Delek is still interested," Shell spokesman Larry Lalonde said.
"This is the final attempt."
The two sides had been in talks earlier but walked away from the table on June 30.
At the hearing on Tuesday, Jim Boles, Delek's head of business development, said the company ended negotiations because the facility's need for major maintenance would have forced a shutdown until next spring.
Shell has estimated the cost of a turnaround at $50-million.
A spokeswoman for the union representing the refinery workers said the offer appears to be a positive step, providing Shell intends to negotiate in good faith.
"It's good news and we're hoping it's not only a public relations operation," said Catherine Escojido of the Communications, Energy and Paperworkers.
Last week, a Quebec court extended an injunction preventing Shell from dismantling any refinery equipment until Sept. 10.
Ms. Escojido said the union was scheduled to ask a judge Friday to also force the company to make sure the equipment is kept in good working order.
Jeffrey Jones