A decision is expected on a sale or other alternative, including having the operation in the Dartmouth community converted to a terminal, by the first quarter of 2013, Imperial executive Gilles Courtemanche told a news conference Thursday.
"The demand for diesel has grown by a factor of five, but gasoline demand in Europe today is lower than it was in 1970," said Courtemanche, vice-president of refining and surplus for Imperial Oil (TSX:IMO).
"So that is causing surplus gasoline production," he said. "The Dartmouth refinery operates in the highly competitive, over-supplied Atlantic basin, which as you all know is open to significant global competition."
Courtemanche said there are a couple dozen potential buyers in a variety of businesses. He cited an airline company that bought a refinery recently in Pennsylvania to meet its needs as an example of the diversity of possible buyers.
About 200 employees and 200 contractors work at the refinery and related terminals in Dartmouth, Sydney, N.S., Corner Brook, NL, Sept-Iles, Que., and Cap aux Meules in the Magdalen Islands.
Converting the refinery to an import terminal would require about 20 to 25 employees, Courtemanche said. The refinery now processes almost 90,000 barrels of crude oil per day.
He said the Halifax airport and the Department of National Defence need a secure supply of fuel and "our commitment is to maintain that security of supply via a terminal as opposed to refining the crude oil and turning it into finished products."
Nova Scotia Premier Darrell Dexter said Imperial Oil's announcement would be felt most by its employees.
"This will be a difficult day for a lot of people at that refinery," Dexter said at the provincial legislature. "It will be a difficult day for the community."
The company's decision comes two months after the provincial government extended a tax break for the refinery for five years.
But Dexter said he has no regrets providing that relief.
"Anybody who thinks that putting higher taxes in place for the refinery will make it more attractive as an asset for sale is really in la-la land," he said.
"We have to be concerned, as governments, about things like energy supply and security and what these things mean when you fail to keep this kind of a key piece of the economy."
Nova Scotia once had three refineries. If the Imperial Oil facility were to shut down, it would leave the province without any.
The Dartmouth refinery began production in 1918 and has a capacity of about 88,000 barrels a day. It produces a wide range of petroleum products, including gasoline, diesel, jet fuel, home heating fuel, marine fuel, heavy fuel oil and asphalt.
Imperial Oil is a major producer of crude oil and natural gas, Canada's largest petroleum refiner and a key petrochemical producer in addition to running a coast-to-coast supply and retail service station networks, operating as Esso.
Shares in the company were down 1.6 per cent or 68 cents to $41.32 Thursday on the Toronto Stock Exchange.