Refinery news, CLL is a real company, Ya BabyGreat Falls refinery changes hands
By JAMES E. LARCOMBE Tribune Business Editor
The Montana Refining Co. in Great Falls will have a Canadian owner at the end of the March, officials said late Thursday.
Connacher Oil and Gas Limited, a Calgary-based exploration and production company, has reached agreement with the Texas-based Holly Corp. to buy the refinery.
The facility along the Missouri River, which employs about 100 workers, may be the smallest full-service oil refining operations in the United States. The refinery has a production capacity of about 8,000 barrels per day.
Connacher plans no immediate changes at the Great Falls operation, its top executive said Thursday.
"We anticipate that virtually all the employees will stay with us, which we are very pleased about," said Richard Gusella, Connacher's chief executive officer. "We are confident we can establish a good relationship with all those people."
The sale deal is expected to be final on March 31.
"We are pleased with this transaction and we believe the valued employees and assets of Montana Refining Co. have a bright future with Connacher," the Holly CEO, Matthew Clifton, said in a news release.
Connacher and Holly announced a possible sale in December and have been working on a deal since then.
"We have spent many hours on a complicated transaction, which oil refineries tend to be," said Gusella, noting environmental issues, supplier relationships and other issues needed to be cleared up.
There will be no immediate operational changes, and the facility will hang onto the Montana Refining Co. name.
"It's a well-known brand name, and it stays with the refinery," Gusella said.
Connacher will add a number of accounting and support jobs in Great Falls to replace functions handled by Holly from Texas.
"We will be a job creator as well as a job preserver," Gusella said. "We think this is a positive business deal for Connacher and we think it's going to be positive for Great Falls and Montana as well."
Buying a refinery in the United States is a key part of Connacher's plan to produce heavy oil from its Great Divide oil sands project in northern Alberta. The company is awaiting final regulatory approval to go ahead with developing the oil sands, a project that could have a 25-year life.
Oil sands development has created a sizable energy boom in Alberta. Much of the oil produced is expected to be shipped to the United States.
Having a refinery capable of refining the oil from the new fields will help offset some of Connacher's financial risk in pursuing the big project. Heavy oil is a key component in asphalt, an important product for Montana Refining.
Buying the Great Falls refinery "gets us into the game in the U.S., as far as the oil sands go," said Gusella.