BP to Join Irving Oil in Refinery Project

BP Plc is joining Irving Oil Corp. to consider building the Eider Rock refinery in New Brunswick, Canada, to supply the U.S. Northeast with transportation fuels.

BP will contribute $40 million for a study of the project, which is expected to cost at least $7 billion, BP and Irving said in a statement today. The research may lead to a joint venture to build the plant, which would have the capacity to process 300,000 barrels of oil a day, the companies said.

A final investment decision isn’t expected before 2009 for the refinery, which Saint John, New Brunswick-based Irving expects to be operational in 2015. The closely held company already owns Canada’s biggest refinery nearby, also with a capacity of 300,000 barrels a day.

No new refinery has been built in North America since Shell’s Scotford plant in Alberta in 1984.

The plant would mostly make transportation fuels like ultra-low sulfur gasoline and diesel as well as jet fuel to sell in the U.S. Northeast and possibly Europe, Kevin Scott, Irving Oil’s director of refining growth, told Bloomberg News. He said Irving Oil may be the refinery’s operator if BP joins the venture. New Brunswick, the refinery’s proposed site, borders the state of Maine.

The next phase of engineering, design and feasibility work will cost more than $100 million over 12 to 15 months, the companies said. The plant’s expected startup has been pushed back to 2015 from 2013 after Irving Oil reviewed construction plans and labor force requirements, the report said.

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