After an absence of more than 10 years, Irving Oil Ltd. is spending about $80 million to reactivate its marine terminal and fuel storage facility in the Dartmouth, N.S., neighbourhood of Woodside.

About 200 people are currently employed on the construction project, which Irving Oil says it plans to complete by next fall and is part of the company's business strategy to compete head-to-head with Exxon in the Nova Scotia market.

"Yes, we will be supplying our own needs once this terminal is operational in the fourth quarter of next year," said Mike Thompson, logistics and distribution manager for Saint John-headquartered Irving Oil.

"And we are expanding to meet the need of our customers and future customers."

Irving Oil is adding a new jetty at its marine terminal on the Dartmouth side of Halifax Harbour where it expects three or four tankers a month.

It is also building an expanded, six-lane truck-loading facility at 500 Pleasant St. That's where trucks will pick up gasoline and home heating oil for delivery all over the province.

'Time is right to invest in our own infrastructure'

New sections of pipeline are being installed under Pleasant Street and along Highway 111 so petroleum brought in by ship can flow to eight Irving storage tanks up the hill.

Those tanks were mothballed back in 2001, but by next year will hold two grades of gasoline, low-sulphur diesel, furnace oil, jet fuel and marine fuel.

Two things are behind Irving Oil's relaunch into the Nova Scotia market.

A reciprocal agreement between Irving and Exxon signed in 2001 expires at the end of December. That deal essentially allowed Exxon and Irving to divvy up the gasoline market, with Exxon continuing to supply most retail gas stations in mainland Nova Scotia and Irving Oil supplying all retail gas stations in New Brunswick.

It meant Irving stations in Nova Scotia sell Esso product, while Esso stations in New Brunswick sell Irving gas.

"That reciprocal agreement has run its course and we've made the decision the time is right to invest in our own infrastructure," said Thompson.

"The greater Halifax market and Nova Scotia market as a whole continues to be a core market for us. We have been here for 80 years and we will be here for the long haul."

Until Exxon shuttered its Imperial Oil refinery in Dartmouth in 2013, the agreement meant consumers could rely on Irving Oil's Saint John refinery and Imperial to back each other up if supplies ran low.

Labour Day gas shortage

The Dartmouth closure disrupted that deal as consumers learned over the September Labour Day weekend when most gas stations in mainland Nova Scotia ran out of gas, many for a few days.

Exxon took responsibility for a shortage it attributed to delays in ship arrivals and a shipment not meeting federal specifications.

Irving Oil trucked in gasoline from its Saint John refinery to fill up its own pumps and some of Wilson Fuels's largest-volume stations in the Halifax area.

"Reactivating the Irving terminal will undoubtedly improve the overall supply chain for petroleum products in Nova Scotia," Thompson told CBC News in an interview from Saint John .

"It's hard to say whether it will totally eliminate any and all disruptions, but it will surely help."

The provincial government has hired two people to look into why the gasoline shortage occurred and recommend how to prevent future shortages. Their review is due at the end of this month.

The introduction of competition into the Nova Scotia gasoline market is welcome news for independent gasoline retailers and re-sellers such as Wilson Fuels.

What's unclear is whether the province will have enough volume to keep both Exxon and Irving in business.

Over the past few years Exxon has sold off marine terminals in the northeastern U.S. where it does not operate refineries.

And federal standards mandating that cars become five percent more fuel efficient each year between now and 2025 could also affect the size of the market.