$13-billion oil refinery proposed for Kitimat area

As Enbridge continues to move forward with its plans for a pipeline to ship oil through Kitimat to Asia, David Black - the owner and president of Black Press which owns newspapers throughout BC including the Kitimat Northern Sentinel - 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 north of Kitimat and 25 kilometres south of Terrace large enough to process all of the capacity from the Northern Gateway pipeline prior to it being shipped through the Douglas Channel. 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.

“We want it to be the cleanest and the greenest operating refinery in the world...Because Canada has such stringent environmental regulations, it will likely be the cleanest refinery built in the world in the next 20 years.”

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.

“I really believe all of these jobs are needed for the next generation and for those in communities where mills may be closing in the next few decades,” he said.

With work on the Kitimat Modernization winding down at about the same time as the construction of this project gets underway, Black says there could be a large labour force here in the northwest.

"If all the projects move ahead, the temporary construction jobs could move into full-time as people move from one project to another," he said, noting the 2,100 people at the modernization camp would be available for this or the proposed LNG plants move ahead.

"I don't see Kitimat as a Fort McMurray. When kids need work they zip up to Fort McMurray and then back, whereas I can see people looking at Kitimat as a place they could move to and make a home."

So far, 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.”

Kitimat mayor Joanne Monaghan said she was excited to hear about the plan.

"This project will probably, if it goes ahead and we are hopeful it does, will probably change the face of the northwest forever," she said.

"I think this is a great day in history."

Terrace mayor Dave Pernarowski said he too was glad to hear of the proposal.

“The City of Terrace is always open to new business and job creation opportunities. Mr. Black is a highly respected and successful businessman in B.C. and, as the owner of one of our key media outlets, the Terrace Standard, he is a valued member of our growing business community," he said in an e-mail to Black Press.

“At this time, we don’t know enough about the project to comment one way or another about it, but we look forward to working with Mr. Black in the future and engaging with our citizens regarding any major investments that could create jobs and help grow our amazing city.”

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.

“This is obviously not my field. But I worry about the next generation, we really need jobs and we need decent jobs,” he said.

Black also said the refinery would help address concerns from the province about an economic benefit to BC from the pipeline.

For his part, Skeena - Bulkley Valley MP Nathan Cullen said he is doubtful anything will come to pass from this announcement.

"He's making an announcement with no money, no local support and no support from First Nations so it is very hard to take seriously," he said.

"There is a reason nobody is backing this...For a newspaper baron to say how the oil industry should be running when nobody in the oil industry is doing this themselves is ridiculous."

For its part, Enbridge was trying to keep a low profile on the day and released a simple statement about the Northern Gateway pipeline project.

"Enbridge Northern Gateway remains committed to the regulatory process reviewing our application for the project. The Formal Hearings as part of the Joint Review Panel process are set to begin September 4 where issues related to the project are to be reviewed in public and in detail," said company spokesperson Todd Nogier.

Look for more on this story throughout the day here at www.northernsentinel.com