Newspaper chain owner proposes C$13 billion Canada refinery
CALGARY, Alberta (Reuters) - A British Columbia newspaper publisher is proposing a C$13 billion ($13.2 billion) refinery on Canada's West Coast to process all of the oil-sands-derived crude that would flow through Enbridge Inc's contentious Northern Gateway pipeline from Alberta.
Enbridge, however, had little to say about the ambitious pitch by David Black, owner of Black Press Ltd, as the pipeline company prepared for the start of the formal part of the Northern Gateway regulatory hearings next month.
Black said on Friday that the huge plant would process up to 550,000 barrels a day of crude at a site near Kitimat, British Columbia, the terminus of the proposed C$6 billion Northern Gateway. That would make it the biggest refinery in the country.
It would allow British Columbia to share more of the economic benefits of Northern Gateway by creating 3,000 full-time jobs and 6,000 construction jobs, said Black, who acknowledged he is no refining expert but has mulled such a proposal for seven years.
Black Press runs 150 newspapers in Canada and the United States, including the Beacon Journal in Akron, Ohio; the Honolulu Star-Advertiser and the Advocate in Red Deer, Alberta.
British Columbia Premier Christy Clark caused a stir last month by saying her government will not support the pipeline that would cross the mountainous province unless British Columbians can get more money to compensate for the environmental risk.
Besides offering economic benefits, Black said a refinery targeting Asian markets would remove any threat of a heavy crude spill on Canada's West Coast, a major worry among environmentalists and native groups opposed to Northern Gateway.
Enbridge declined to comment other than to say it remains committed to the regulatory process for reviewing Northern Gateway, which would move 525,000 barrels a day over the 1,177-km (731-mile) route.
Black's plan is the latest twist in the Northern Gateway saga that has pit governments against each other, riled many aboriginal communities in British Columbia and dominated headlines in Canada. Under current plans, tankers would take the diluted bitumen from an oil port at Kitimat and ship it to California and across the Pacific.
The oil industry and governments of Canadian Prime Minister Stephen Harper and Alberta Premier Alison Redford see opening Asia to tar-sands-derived oil as key to diversifying markets and boosting economic returns, which are held back by a glut of supplies in traditional U.S. Midwest destinations for the crude.
Black's new company, Kitimat Clean Ltd, has briefed governments on the plan and will submit an environmental assessment application, he said.
The plant would produce 240,000 barrels a day of diesel, 100,000 of gasoline and 50,000 of kerosene or aviation fuel. Construction would start in 2014 and take six years.
He said he has analyzed his proposal with investment bankers and concluded that projected revenues and profit would be large enough to enable equity and debt financing.
The petroleum products would be marketed throughout the Pacific Rim, with China being a main target, Black said in remarks posted on the company's website. The company would offer investment opportunities to Chinese buyers.
"If China is not interested there will be other buyers. A Kitimat refinery will be a compelling opportunity for any country that has to import oil," he said. "It will offer a guaranteed long-term refined fuel supply at a competitive price from a new diversified source."
The last refinery built in Canada was Royal Dutch Shell's Scotford plant in Alberta in 1984. ($1=$0.98 Canadian)
(Editing by Dale Hudson)
- Obama and Castro shake hands, Zuma humiliated at Mandela memorial |
- Google bus blocked in San Francisco gentrification protest
- Reporter can keep sources secret in Colorado theater shooting: court
- Thai PM urges protesters to take part in election |
- U.S. regulators seek to curb Wall St. trades with Volcker rule