* Oppenheimer Investments would lead debt financing
* Refinery would be Canada's largest at 550,000 bpd
* Black says project would help Alberta oil industry
March 6 A Canadian newspaper magnate said he is
close to finalizing a C$25 billion ($24.3 billion) financing
deal for his proposed West Coast refinery project aimed at
creating a new market for Alberta oil sands production, a media
report said on Wednesday.
David Black, who announced the project last year, told a
business audience in Vancouver he expects to sign a memorandum
of understanding with Swiss-based Oppenheimer Investments Group
for the proposed plant, which would be located in Kitimat,
British Columbia, according to a report in the Vancouver Sun.
The newspaper quoted Richard Cooke, senior managing director
of Oppenheimer Investments, as saying the firm had enough
investors to fund the whole debt financing. The arrangement
would keep all of the ownership within the Canadian province.
The 550,000 barrel a day plant would easily be Canada's
biggest refinery, with a cost of C$16 billion. The rest of the
money would go to oil and natural gas pipelines as well as
tankers, according to notes from Black's speech to the British
Columbia Chamber of Commerce.
"The refinery will also provide enormous benefits for
Alberta and Canada in that it will consume 400,000 barrels per
day of heavy oil from Alberta that is in danger of being
landlocked," Black said.
"By changing the North American supply/demand situation this
will have the additional positive effect of reducing the C$25
billion per year of existing sales discounts on all Canadian oil
exported to U.S. refineries, freeing up more profit and more
Black has not built refineries before, which has led to
questions among some energy-industry experts about this proposal
being completed. His company, 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.
He announced the plan last year against a backdrop of
opposition among environmentalists and other British Columbians
to Enbridge Inc's C$6 billion Northern Gateway
pipeline, which would transport bitumen from the Alberta oil
sands to Kitimat for shipment to Asian markets.
Black said on Wednesday that he has decided on a design by a
Calgary company called Expander Energy, which has a new approach
to processing heavy oil that reduces greenhouse gas emissions by
half compared with his preliminary plan. It also added C$3
billion to the estimated cost.