Plans announced for $13 billion oil refinery in the northwest

David Black - the owner and president of Black Press which owns newspapers throughout BC including the Prince Rupert Northern View - announced this morning plans to construct a $13 billion oil refinery in the Kitimat area.

Black incorporated a company called Kitimat Clean Ltd., which plans to build a refinery 25 kilometres south of Terrace large enough to process all of the capacity from the Northern Gateway pipeline to be shipped out. The plant would process up to 550,000 barrels per day of dibit to be shipped back to Edmonton, 240,000 barrels per day of diesel, 100,000 barrels per day of gasoline and 50,000 barrels per day of kerosene. The product would then be shipped to a marine terminal site in Kitimat that is currently planned to be used for the Enbridge crude oil shipping terminal.

"The refinery will eliminate any chance of a crude oil spill from shipping through Kitimat. Gasoline, kerosene and diesel, which are the products from the refinery all float and are all evaporative," explained Black.

According to Black, processing the oil before it is shipped out will remove the threat of offshore pollution from heavy cruise due to the evaporative properties of kerosene, gasoline and diesel.

Construction plans call for groundbreaking in 2014, with the facility complete in 2020. During the five year construction period, an estimated 6,000 workers would be needed, while another 3,000 permanent jobs would be created during operation, with half of those being provided through private contractors.

Prior to the submission of the environmental assessment application earlier this morning, Kitimat Clean Ltd. has spoken to the different levels of government about the project, have reviewed the project with investment bankers and been told the revenues and profits are enough to enable equity and debt financing, have discussed the plans with Enbridge and other oil sands producers and brought on-board a refinery consultant.

However, the $13 billion for the construction of the project has not been confirmed.

“The money for the environmental assessment has been put up. It will take about two years for the assessment, and while we're doing that we'll be talking to industry and customers in Asia and getting the rest of the financing in place,” said Black, noting that not all of the partners in the Northern Gateway project are in favour of a refinery as opposed to shipping the oil.

“If there is no Enbridge pipeline there is no refinery. And if we don't believe the pipeline can be built in a way that ensures any leaks will be immaterial then it shouldn't be built.”

However serious discussions with the Haisla and the Kitselas, on whose traditional territories the terminal and refinery would be located respectively, have not taken place. Art Sterritt of the Coastal First Nations, however, says more work needs to be done with other groups along the shipping line.

“The air pollution and impact from this refinery will have the same impact on the area, and removing the problem for the Skeena and the Nass is not solving half of the problem...You're going to be polluting that area even more so,” said Art Sterrit of the Coastal First Nations.

“If you're serious about doing business in the north, you need to be out there talking to First Nations in the region.”

Look for more on this story at thenorthernview.com as it becomes available.