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By Jessica Resnick-Ault and Jarrett Renshaw
NEW YORK, June 22 (Reuters) - A team of former Wall Streetoil traders who own the Come By Chance refinery in easternCanada are forming their own crude supply desk ahead of theexpiration of their fractious contract with oil major BP Plc, according to two sources familiar with the plant'soperations.
The small commercial desk at the 115,000 barrel-per-dayrefinery in the province of Newfoundland will rely largely onthe spot crude market, but will also ink term deals, the twosources said.
The refinery is operated by North Atlantic Refining LLC(NARL), which is backed by private equity firm SilverpeakPartners.
Since buying the refinery in late 2014, the team of tradershas shifted from a supply of largely Iraqi crude to a morediverse array that includes U.S. shale oil, West African crudesand oil pulled from nearby offshore fields, such as Hiberniangrade.
The sources said the Hibernian grade crude oil will likelybe a mainstay and the new commercial desk will look to sell moreproducts into eastern Canada.
The shift to a merchant refiner model from having all crudesupplied by a third party, in this case, BP, follows atumultuous two years under that contract that culminated inlawsuits filed last year.
The traders arranged the supply deal with BP, which tookresponsibility for providing the plant with crude and forselling its products.
Under the contract, both parties have some control over thecrude slate, and the two sides have alleged in lawsuits that theother selected a mix of crudes that failed to maximize profits,among other accusations, court records show.
Two civil suits filed in U.S. federal courts in Texas andNew York by NARL have been put on hold while the two parties arein ongoing arbitration, court records show.
NARL and BP both declined comment.
The traders behind Silverpeak Strategic Partners - thecommodities side of Silverpeak Partners - include Neal Shear,who helped build Morgan Stanley's oil trading division; KaushikAmin, former chief executive officer of RBS Sempra Commoditiesand global head of liquid markets for Lehman Brothers, and HarshRameshwar from Merrill Lynch Commodities. (Reporting by Jessica Resnick-Ault and Jarrett Renshaw, editingby G Crosse)
