UPDATE 1-U.S. merchant bank run by energy veterans buys aging Newfoundland refinery

Fri Sep 5, 2014 6:16pm EDT
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(Adds detail on buyers and additional background on oil supplier and refinery history)

CALGARY, Alberta, Sept 5 (Reuters) - A New York-based commodities merchant bank run by veteran energy traders, Neal Shear and Kaushik Amin, announced on Friday plans to buy the aging Come by Chance refinery in Newfoundland from South Korea's state-run oil company.

Korea National Oil Corp said it will sell the 115,000-barrel-per-day refinery to SilverRange Financial Partners LLC for an undisclosed price following a months-long search to find a buyer.

The deal also includes 53 gas stations and convenience stores.

SilverRange is a New York-based merchant bank focused on energy and natural resources owned by SilverPeak Partners, a real estate fund with over $12 billion in assets under management, according to its website.

"(The refinery) is strategically located along Atlantic crude oil shipping routes and provides access to petroleum markets in Europe and the U.S. Eastern seaboard," SilverRange partner Harsh Rameshwar said in the release.

As part of the sale, the new owners have negotiated a new supply and offtake agreement with BP Plc, ousting Australia's Macquarie Bank Ltd, a source familiar with the situation told Reuters.

No other details of the potentially lucrative offtake deal were available, but losing the deal was likely a blow to the Australian bank as it continues to build its physical oil trading operations. It had agreed the offtake with KNOC in October 2011.

The acquisition is the latest in recent months that has seen an investor buy refining assets in a bid for a share of the North American physical oil market just as banks face unprecedented regulatory scrutiny and struggle with tight margins.   Continued...