Refinery plan can succeed whether oil is high or low, says Pacific Future Energy executive

A proposal to build an oil refinery in the Kitimat Valley has filed its project description with government regulators.

A competing company aiming to build an oil refinery on Dubose Flats — the exact same place David Black has been eyeing for his Kitimat Clean refinery plan — has submitted their project description with regulatory agencies.

Pacific Future Energy is planning a refinery which would produce up to 160,000 barrels a day of diesel, 40,000 barrels a day of gasoline, 13,000 a day of kerosene, and 10,000 a day of liquefied petroleum gas or propane.

Butane would also be produced, they said.

The company says it would need 3,500 people for construction and 1,000 for operations.

Pacific Future says the construction could potentially begin in 2018 with a 2021 production start date. It’s valued at approximately $15 billion.

The company’s executive chairman Samer Salameh said the business model for the refinery makes sense even with a depressed cost of oil, which has dipped to around $30 a barrel.

“The beautiful thing about the refinery is that if the price of oil goes down we make more money. If it goes up we make a lot of money, it doesn’t matter,” he said.

That’s because the oil is purchased by the refinery at a lower cost, however the price of refined fuels doesn’t experience that same drastic change, meaning profit margins could actually be better.

Salameh said he spent much of 2015 in China working on purchase agreements and says getting customers will be the easy part of developing the refinery, saying demand in Asia is growing.

This project’s proposed site at Dubose does potentially put it in conflict with David Black’s Kitimat Clean proposal for a refinery.

Salameh says he hasn’t spoken with Black for a couple of years but the choice of site comes down to the availability of flat land to construct the refinery.

“We’ve looked at sites in the Prince Rupert area, we’ve looked in Kitimat, we’ve looked in Terrace,” he said. “The site we’re proposing today is our primary site, which doesn’t mean we wouldn’t end up somewhere else if need be.”

He said he’s not aware of the specific plans by Black for that area.

The use of biomass for power generation is also being touted by the company as a way to kickstart the area forestry industry too, using material from area sawmills to produce up to 50 megawatts of the approximately 250 megawatts needed to run the refinery, he said.

At just three per cent of the CO2 emissions of other refineries running today, Salameh says he would expect all future refineries to be built to the standard they’re following. He says that would have a huge impact.

“I think this will have more impact on the environment than almost any other initiative around the world happening right now,” he said.

The bitumen for this refinery is anticipated to be delivered by rail. Since it won’t have to be diluted for transport in a pipeline the cooled bitumen in a rail car is near solid, approximately the consistency of peanut butter, and is stable and is classified for rail transport as non-dangerous. The company has dubbed the product “neatbit.”

 

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