VANCOUVER (Reuters) - A Canadian newspaper mogul is pushing ahead with a $27 billion plan to build an oil refinery on Canada’s west coast, hoping to file for regulatory approval before year-end and with construction targeted for 2016.
The 550,000-barrels-a-day plant would easily be Canada’s biggest refinery, producing gasoline, jet fuel and diesel for Asian markets from the output of the country’s rich oil sands.
David Black, president of Kitimat Clean Ltd, also told Reuters in an interview that he had launched informal talks with the federal government on loan guarantees for Chinese investors such as the Industrial and Commercial Bank of China.
“I’ve begun discussions with the federal government,” Black said. “I haven’t presented anything to them yet, but I’ve been very encouraged with their responses and it is in line with what the government has done many times before for projects that are vital to Canada’s interests.”
Black is better known as the founder of Black Press Ltd, a Canadian newspaper chain that owns more than 150 print and online papers, including the Honolulu Star-Advertiser and the Advocate in Red Deer, Alberta.
The newsman-turned-oil-investor said that he expects to file for regulatory approval soon.
“I hope this fall,” he said. “We have the technology and the refinery approach nailed down, so I think I could do it this fall.”
The environmental review is expected to take two years and construction will take six, putting start-up around 2022.
Black has already inked a deal with China’s ICBC to help finance the construction of the refinery, which will be built near the port town of Kitimat in northern British Columbia.
He said that Chinese investors had agreed to fund the project so long as there is “Canadian skin in the game,” meaning money from local investors.
If it goes ahead, the development would create some 3,000 full-time jobs and about $1 billion a year in tax revenues, Black said, allowing British Columbia a bigger slice of the economic benefits of Alberta’s oil.
That would address one of the five conditions set out by the province’s premier, Christy Clark, in order for her government to support the construction of new pipelines to transport bitumen from the oil sands to Canada’s west coast for export.
The federal and Alberta governments are eager to open up export markets to Asia as congestion on pipelines to the United States means crude is getting bottlenecked in landlocked Alberta.
Black had originally hoped to feed the refinery with oil from Enbridge Inc’s Northern Gateway pipeline, but with that controversial project in regulatory limbo, he is now eyeing a separate “parallel” pipeline.
All told, the publishing mogul’s $27 billion plan involves the construction of a “state-of-the-art” refinery, an oil pipeline, a gas pipeline and oil tankers.
The refinery would use technology pioneered by a Calgary-based company, Expander Energy, that it says would cut carbon dioxide emissions in half compared with traditional refineries.
Black, an avid sailor, also noted that a refinery targeting Asian markets would remove the threat of a heavy crude spill on Canada’s West Coast, a major worry among environmentalists and native groups opposed to new pipelines.
“I’m only doing this because I didn’t want to see diluted bitumen on tankers,” he said. “I love the coast and I thought it was a dumb idea to put dilbit on tankers when we could put refined fuel in a lot safer and keep the jobs at home.”
Reporting by Julie Gordon; Editing by Joseph Radford