CALGARY, Alberta, Nov 13 (Reuters) - Harvest Energy Trust HTE_u.TO said on Thursday it has decided to defer a C$2 billion ($1.6 billion) expansion of its Come By Chance refinery in the Atlantic province of Newfoundland and Labrador until financial conditions improve.
Instead of the 75,000 barrel per day capacity expansion, which would have boosted output to 190,000 barrels per day, the trust will begin working on C$300 million of de-bottlenecking projects at the site, with work beginning next year.
“In light of current market conditions we’ve elected to defer this (expansion) project to when financial markets are more supportive,” John Zahary, Harvest’s chief executive, said on a conference call.
The expansion of the 115,000 bpd facility would have seen Harvest add new equipment to allow the plant to process heavier and more sour grades of crude.
Harvest, an integrated oil producer and refiner, has run Canada’s easternmost refinery for nearly two years. Zahary said last month that the expansion project was only an option, not a requirement for the company, which had been searching for a partner to pay for the expansion.
Harvest also said on Thursday that its third-quarter profit jumped to C$295.8 million, or C$1.73 per unit, from C$11.8 million, or 8 Canadian cents, in the year-earlier quarter as oil prices rose and it profited from commodity price hedges.
The company’s cash flow, the money used to pay distributions to unitholders, fell 30 percent to C$133.5 million, or 84 Canadian cents per unit, from C$191 million, or C$1.22, in the third quarter of 2007.
Revenue climbed 44 percent to C$4.6 billion
The company’s oil and gas output fell 8.4 percent to 54,926 barrels of oil equivalent a day.
Harvest units, which had dropped 52 percent over the past year, rose C$1.29 to C$12.29 at midday on Thursday on the Toronto Stock Exchange
$1=$1.23 Canadian Reporting by Scott Haggett; editing by Peter Galloway