MONTREAL - Shell Canada says it will go ahead with plans to convert its largest refinery into a distribution terminal after negotiations with a potential buyer fell through.
Shell and Delek US Holdings say they've ended talks on the potential sale of the Montreal East refinery, a move which means bad news for the facility's employees.
Shell has been under political pressure to make every effort to save the 800 jobs at the refinery instead of converting it to a terminal, which would retain only about 30 jobs at the end of the conversion.
The oil giant says when no buyer emerged at the end of last year, it started parallel plans to convert the 77-year-old refinery to a terminal.
Now that the Delek negotiations have ended, Shell says it's focusing on safely converting the facility to a terminal in a way that ensures adequate supply of fuel for its customers in Quebec, Atlantic Canada and Eastern Ontario.
In July, the union representing employees at the facility obtained an injunction from Quebec Superior Court suspending the dismantling of the Montreal operations.
Shell must still get the Quebec government's approval to shut down the refinery.
Delek had previously walked away from talks in the past because of the heavy maintenance costs required and the expensive purchase price for the refinery.
Shell says the total price tag to purchase and upgrade the refinery would be at least $1 billion. The purchase includes Shell's Montreal refinery, light oil terminal and 19 per cent stake in Portland Pipe Line Ltd.
