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Regina refinery fire curbs Federated Co-op’s output

The Regina plant supplies fuels to member-owned Federated’s network of retail gasoline and bulk fuel outlets.

Seth Perlman/AP

The Regina oil refinery run by Federated Co-operatives Ltd. will produce fuels at well below capacity rates for an indefinite period as crews repair equipment and investigate the cause of its fourth fire in just over two years, officials say.

The Christmas Eve explosion and blaze damaged gear in a part of the Co-op Refinery Complex that processes heavy oil into gasoline, and forced the plant to curtail some purchases of that grade of supply. It is negative for Canadian heavy crude prices, which have in recent months traded at a deep discounts to benchmark light oil grades.

The plant, which supplies fuels to member-owned Federated's network of retail gasoline and bulk fuel outlets, will operate at about 60,000 barrels a day, or 46 per cent of capacity, for the next two weeks, then rates will rise to 90,000, said Gil Le Dressay, vice-president of refinery operations. The refinery's capacity is 130,000 barrels a day following a $2.7-billion expansion completed 14 months ago.

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The plant's last major incident was an explosion and fire in Oct. 2011 that injured 10 workers and cut production. It has also had two less severe incidents in the past 27 months. No one was injured in last week's fire.

"It's very alarming and it's very concerning to us, obviously, to have that many incidents in the facility," Mr. Le Dressay told reporters on a conference call. "What we are doing and what we have been working on is ramping up our process safety management and we're in the process of implementing elements of that program."

He said he did not know yet when the investigation and repairs would be complete.

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Mergers and Acquisitions Reporter

Jeffrey Jones is a veteran journalist specializing in mergers, acquisitions and private equity for The Globe and Mail’s Report on Business. Before joining The Globe and Mail in 2013, he was a senior reporter for Reuters, writing news, features and analysis on energy deals, pipelines, politics and general topics. More

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