BP Joins Irving Oil in Proposed Eider Rock Refinery Project



    SAINT JOHN, NB, March 17 /CNW/ - International oil major BP and regional
refiner and marketer Irving Oil have entered into a Memorandum of
Understanding to work together on the next phase of engineering, design, and
feasibility for the proposed Eider Rock refinery in Saint John, New Brunswick,
Canada. BP will contribute US$40 million as its share of funding for this
stage of the study and the two companies will also investigate the possibility
of forming a joint venture to build the refinery should they decide to
proceed.
    Irving Oil conducted initial feasibility work and informal public
consultation in 2006, and has been engaged since January 2007 in permitting,
public consultation, and engineering design for the proposed 300,000 barrel
per day refinery. The refinery would be situated close to Irving Oil's
existing 300,000 barrel per day refinery and the existing Irving Canaport
deepwater crude oil terminal which receives VLCC cargoes of crude oil and is
located 65 miles (105 km) from the US border.
    This next phase of engineering, design and feasibility work, combined
with ongoing permitting and community engagement activities represents over
US 100 million of investment over the next 12-15 months.
    "We are excited that a company of BP's calibre sees the potential in our
region and in this project to meet the need for a reliable and secure supply
of refined products for the north east," said Kenneth Irving. "BP brings
international expertise and crude supply, but what really drew us to partner
with BP was the cultural fit with our company and our shared belief that the
world has changed when it comes to matters that relate to environmental
performance and security of supply. Our shared belief on the future of energy
will increase the potential of this project."
    "This refinery project is of great interest to BP because of its ideal
location close to the markets of the north eastern US where product supplies
are increasingly in deficit," said Iain Conn, chief executive of BP's refining
and marketing business. "BP is keen to develop projects which enhance the
energy security of Canada and the US. Irving Oil has a well-deserved leading
reputation in refining for the east coast. The two companies have a good track
record of working together and we are pleased to be jointly undertaking the
feasibility work on this exciting opportunity."
    "This project would support the further development of the New Brunswick
energy hub and the refining industry on the east coast," said Kevin Scott,
Irving Oil's Director of Refining Growth. "We will continue to follow the
rigourous permitting process outlined by our Federal and Provincial
Governments, and we will continue to consult our community to ensure that, if
the project proceeds, it will be one the community can be proud of."
    A final investment decision is not expected before 2009 and, although the
final costings will only be clear once all the detailed engineering and design
work is completed, the refinery is expected to cost at least US$7 billion. If
permitting approval is received and an investment decision is made to proceed,
site preparation would begin in 2010, and full scale construction would begin
in 2011 with start-up expected in 2015. Irving Oil has committed to using the
best available proven technology to develop a refinery with leading
environmental performance and economic efficiency.

    About BP

    BP is one of the world's largest oil and gas companies with operations in
more than 100 countries across six continents. The company's main businesses
are exploration and production of oil and gas; refining, manufacturing and
marketing of oil products and petrochemicals; transportation and marketing of
natural gas; and BP Alternative Energy, a growing business in renewable and
low-carbon power and next generation energy technologies. Further information
is available at: www.bp.com and www.bpalternativenergy.com

    About Irving Oil

    Irving Oil is the regional refiner and marketer with a history of
long-term relationships and partnerships. The company serves the US Northeast
and Eastern Canadian markets, and currently operates Canada's largest refinery
in Saint John, New Brunswick. The Saint John 300,000 barrel per day refinery
is situated close to diverse crude sources and is the closest refinery to the
US Northeast. It accounts for 75% of Canada's petroleum product exports to the
US, 45% of all clean petroleum products north of New York, and 20% of all US
gasoline and diesel imports. Irving Oil and Repsol YPF are currently
completing construction of Canada's first LNG regasification terminal. The
Canaport LNG terminal will have an initial send-out capacity of 1 billion
cubic feet per day (1bcf/d), and is expected to be operational by the end of
this year. Irving Oil was the first oil company to win an Environmental
Protection Agency (EPA) Clear Air Excellence Award, for its clean gasolines.
For more information, visit www.irvingoil.com

    
         BP Joins Irving Oil in Proposed Eider Rock Refinery Project

    - Irving Oil and BP have signed a Memorandum of Understanding to progress
      engineering and design on Eider Rock, a proposed 300,000 barrel per day
      new grassroots refinery in Saint John, New Brunswick, Canada.

    - The companies are combining technical and engineering expertise as well
      as commercial knowledge to assess the project. The engineering and
      design work will help further define the project scope and costs. BP
      will contribute US$40 million as its share of funding for this stage of
      the study.

    - The investment for the proposed refinery is expected to be at least
      $7 billion, and would be the largest-ever private sector investment in
      Atlantic Canada.

    - The proposed refinery would largely export its products to the US
      northeast where 1.7 million barrels per day of transportation fuels are
      consumed, with more than one million barrels brought in from outside
      the region.

    - The proposed refinery would be close to Irving's existing 300,000
      barrel per day refinery; the Irving Canaport deepwater crude receiving
      terminal; and the Canaport LNG Receiving and Regassification terminal
      currently under construction about 65 miles from the U.S. border.

    - Eider Rock is being designed to handle crude oil from domestic and
      international sources including the Atlantic Basin and Eastern Canada.
      Canadian heavy crude is not transported to the Atlantic Coast, and,
      therefore, is not expected to be part of the supply base.

    - The project would mark the first major refinery built in North America
      in almost a quarter of a century. The project fits with both
      companies' existing portfolios. Irving Oil and BP have fuel marketing
      businesses in Canada and the US northeast.

    - The companies will be making a decision in 2009 as to whether or not
      they will enter into a joint venture to build the refinery. If
      permitting approval is received and an investment decision is made to
      proceed, site preparation would begin in 2010 and full-scale
      construction in 2011, with start-up expected in 2015.

    - Irving Oil conducted initial feasibility work and informal public
      consultation in 2006. In 2007, Irving conducted further engineering
      design and public consultation as well as began the environmental
      assessment process by filing the project with the federal and
      provincial governments.

    - Eider Rock would create 5,000 construction jobs, as well as 1,000
      permanent jobs once operational. To ensure the benefits of Eider Rock
      would be shared by the community and region, Irving has engaged in
      community consultation to identify and address opportunities in such
      areas as training and education, labour availability, business
      capability, infrastructure and community need.

    - The proposed refinery is subject to a comprehensive environmental
      assessment and permitting process under the New Brunswick Environmental
      Impact Assessment Regulation and the Canadian Environmental Assessement
      Act. The proposed refinery would be built and operated in strict
      compliance with regulatory requirements. Irving Oil has committed to
      using the best available proven technology to develop a refinery with
      leading environmental performance and economic efficiency.

    - BP is considering the joint venture with Irving Oil in addition to its
      major planned investments to refine Canadian heavy crude oil and expand
      refining capacity at its Whiting, Indiana refinery, and at its Toledo,
      Ohio refinery where it has announced a planned joint venture with Husky
      Oil.
    

    To view map of Saint John, NB and Study area for proposed second Irving
    Oil refinery, please click here:

    http://files.newswire.ca/693/Refinery.doc




For further information:

For further information: Jennifer Parker, Irving Oil, (506) 202 2992; BP
Press Office, London, +44 (0)207 496 4358; BP Canada Press Office, +1 403 233
1033; BP Press Office, Chicago, +1 630 821 3212

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Irving Oil Operations Ltd.

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