MONTREAL — Negotiations between Shell Canada and a potential buyer to save a refinery in Montreal’s east end are still under way, says the head of a committee formed to help find a buyer.
But, the committee itself has agreed to disband, saying that it wants to allow both the unnamed potential buyer and the energy giant negotiate without interfering in the process.
“We don’t want to be a rock in Shell’s shoe,” said Michael Fortier, head of the committee and a former Conservative cabinet minister.
The committee achieved its objective of finding potential buyers, he said Friday at a news conference. Fortier added he isn’t involved in the negotiations.
“I don’t want to be an annoyance and hence a decision has been taken to disband the committee,” he said.
The name of the interested buyer and the price of the potential transaction have not been revealed due to a confidentiality agreement.
Shell announced last week it was closing the 76-year-old refinery and that it would be converted into a distribution channel.
About 500 employees work at the refinery, including roughly 330 unionized workers, as well as up to 400 contractors hired for various projects at the facility.
An estimated 2,500 indirect jobs rely on the refinery’s operations, which provide about $240 million in annual economic benefits to the city.
The refinery has been estimated by third-party valuators to be worth between $120 million and $160 million. In addition to the offered price, Shell has said it also had to factor that the location is a profitable distribution centre for its products.
The oil company had said two potential offers to purchase the refinery had been rejected. However, Fortier said one of the potential purchasers improved its offer and negotiations started up again.
“The longer they talk, the more promising it is for us,” he said. “The buyer that’s in discussions with Shell has a business plan for the refinery.”
Fortier said Shell expressed concerns the committee might be “an irritant” to the sale discussion, partly because there could be a breach in the confidentiality agreement and details would be leaked to the public.
The committee was supported by three levels of government and the union representing refinery employees as well as other business leaders.
Fortier said no one was paid for working on the committee. He said he was reimbursed for travel expenses after making trips to Calgary, Houston and London.
Quebec’s largest union group has urged consumers to boycott Shell Canada’s gas stations for 24 hours later this week to protest the company’s decision to close a Montreal refinery.
The Quebec Federation of Labour wants motorists to show solidarity on Friday with the 500 workers, all but 30 of whom will lose their jobs when Shell shutters the refinery and converts it into a distribution terminal.
The last oil shipment will arrive in August ahead of the final refining in September. Most of the 500 employees will be required over at least five months through the end of the dismantling and conversion process.
The streamlining move by Shell is part of a broader efficiency drive by the company, as it tries to improve its operations and financial performance in the refining and marketing part of its business.
Shell is already one of Canada’s largest natural gas and petrochemicals producers and a pioneer in the northern Alberta oilsands, where it is spending billions of dollars in major planned expansions.