A deal has reportedly been struck to save the Come By Chance refinery.

The Financial Post says private equity firm Cresta Fund Management will buy a controlling stake, with a plan to convert it to produce renewable fuels.

Owned by North Atlantic Refining Ltd., the facility ceased operations when the pandemic struck last year. There were fears it would be mothballed or become a tank farm for storing fuels. But the provincial government injected almost $17-million to keep it in so-called warm idle with hopes that its life would be extended.

The conversion to renewable fuels is becoming more widespread, with several refiners announcing similar plans in order to remain viable as both Canada and the United States work to reduce carbon emissions.

The Financial Post says the first phase of the conversion would make Come By Chance capable of initially producing 14,000 barrels of aviation fuel and renewable diesel each day by about mid-2022. A second phase would seek to double the capacity and incorporate the ability to produce green hydrogen—where renewable energy such as wind or solar would power the extraction of hydrogen.

The refinery’s roughly 250 employees were notified of the agreement on Monday, weeks after voting 95 per cent to ratify the potential deal.

The transaction is expected to be completed in the third quarter, but the value of the deal was not released.

The refinery has been looking for a new owner since Irving Oil backed away from a purchase and share agreement last year.