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Newspaper Owner Has Plan To Build Oil Refinery In Kitimat

Friday, August 17, 2012 @ 11:36 AM
Kitimat,B.C.  – David Black the owner of 150 newspapers in Canada and the US (including former  ownership of the Prince George Free Press*) says he will submit an application for an environmental assessment for a new 13 billion dollar refinery in the area between Kitimat and Terrace that he says will employ 3,000 people long term in operation and spin off jobs.

 

The new refinery would produce 550,000 barrels a day making it one of the top ten refineries in the world.By comparison the Husky refinery in Prince George produces 12,000 barrels a day, while the Chevron, Burnaby facility produces 55,000 barrels.

Black says the new refinery would eliminate the threat of a heavy oil spill on the coast because all of the product would be refined there.
The company, Kitimatclean,  will make the application as soon as possible. Black says the project would begin construction in 2014 and would be finished by 2020.
 
Enbridge’s pipe line is proposed to be finished construction by 2017. 
 
Black says his  company, Kitimat Clean Ltd, is submitting an Environmental Assessment Application to build a world scale oil refinery at Kitimat BC.
 
The refinery will have the capacity to process all of the output of the planned Enbridge Northern Gateway pipeline.

 

The refinery will be state-of-the-art and designed specifically for processing Alberta oil sands heavy crude oil. "We want it to be the cleanest and greenest upgrading and refining site in the world" says Black in a release issued today.
 
The plant will process up to 550,000 barrels per day of dilbit (condensate diluent and Alberta oil sands bitumen). The diluent will be separated and returned to Edmonton via the proposed Enbridge secondary pipeline.
 
The plant will produce 240,000 barrels per day of diesel, 100,000 of gasoline and 50,000 of kerosene, or aviation fuel.
 
 
The plant will be located at the 3000 hectare Dubose location which is 25 kilometers north of Kitimat and 25 kilometers south of Terrace. The Dubose site is Crown Land zoned for industrial use. The Enbridge pipelines are planned to run through the property.
 
 
(* On its website, Black Press  lists the Free Press as  one of its papers however  it does not  own that  publication though we are told  it is still "associated" with it.  We thank the  reader for  pointing out the discrepancy in our original story.)

Comments

Very interesting.

David Black and Black Press have Not owned the Free Press, for several years now.

Black says the project would begin construction in 2014 and would be finished by 2020.

Enbridge’s pipe line is proposed to be finished construction by 2017.

Quite an assumption, I did not know that the pipeline was a go.

"Black says the new refinery would eliminate the threat of a heavy oil spill on the coast because all of the product would be refined there."

I'm sorry, but the refined oil will still be shipped in supertankers. It's just a different product that will end up in the ocean.

Makes you wonder why Alberta doesn't build a refinery doesn't it?

This has the stink of spin to it. Those sound like pretty elaborate plans for something that is contingent on the pipeline being built.

I smell a rat, perhaps several of them. This warrants an in depth investigation, and I'm going to do it.

Granted, a BC refinery would assure that we export a uniform product instead of the mish-mash that bitumin is (making ocean spills easier to clean up)but that does not address the problem of land spills of bitumin from pipeline failures. If the refinery was built in Alberta near the source, pipelines would only be required to deliver known uniform product and there would be no need for the secondary return solvent line. Plus, the pipeline would be delivering known material which would simplify pumping safety measures and clean ups in the mountainous trail. (Spills must still be expected.)
If we are going to move that stuff, a Canadian refinery makes sense for a better bottom line and a greater variety of potential customers.

@Jim13135: I was thinking the exact same thing. I think the whole point is to utilize Kitimat's strategic location in regards to the Asian market rather than our own North American market. A refinery in Alberta would best serve Canadians...where as a refinery in Kitimat would best serve Asia.....

Talk is cheap, especially when he is talking through his hat. He has never been in the oil business before, never run or built a refinery. If Gateway is built, it will be completed 3 years before any refinery is built. You can bet Enbridge already has customers for the oil, so where is the need for the refinery?

To put it in perspective, note that:

1. The alberta bitumen will still be transported by the Enbridge Pipeline across BC, with all the attendant risks of a spill from a ruptured pipe, so that part of it is completely unchanged.

2. Diesel, gasoline and kerosine will be shipped by tanker. To understand the consequences of a tanker spill like the Exxon Valdez, check out the consequences of diesel spills in BC. Wasn't there one in the Malahat not too long ago when a tanker truck overturned and spilled its load into a river? How long until that was cleaned up? How much did it cost a) the company, b) the taxpayer? How did it effect peoples' lives in BC?

David Black's interview on CBC was fantastic. Hopefully they post it online. Highly recommended.

This is so funny, just PR spin people,refinery in Canada great idea however as someone said the pipeline could be comleted years before the refinery. Also the big money is in the raw product.Black should just keep his eyes on the news papers and forget about this spin. Will enbridge jump at the news NO they have a plan and its not a refnery if so they would have built it already.

He addresses many of the questions posted here, especially about why Kitimat vs. Alberta.

hey, mr Black should start building the plant now, and hope that the pipeline comes thru... lol

Heard the CBC interview,like I said he has no clue. Refinery is great but not part of the plan for enbridge.Dont forget you still have to get the raw oil to the refinery, find investors and oil partners for funding and product to refine. Its all just PR people

yep it sure makes sense to build a mega refinery. Asia wants oil, so they can refine it. They don't want to buy diesel or gas, its raw oil they want. It is not economically viable.... but hey, if they want to build it, go ahead.

All the complaing on this board about not refining in Canada and the jobs that go with it. Now a proposal and the same nasayers pull down their pants and crap all over it immediatly. Lets face it. You people want no industry period.

Yeah, dow, it's funny to watch the naysayers scramble. More to come!

Just say, if we have to take the OIL(Tar) lets refine it here, I know the Deal is we want the Tar and refine it in China and sell it back to you!

We cant refine oil and more efficiently then we can produce lumber. They would rather buy the raw product and do it themselves cheaper and better without the entitled and overpaid union labor. Anyone with $13 billion dollars (unless they won it or inherited it) is smart enough to figure out than he doesnt want to invest that in BC, especially with the NDP coming in.

Black syas "The refinery will have the capacity to process all of the output of the planned Enbridge Northern Gateway pipeline." sounds like this new 'state of the art' refinery proposed for Kitimat is soley reliant on the Enbridge NOrthern Gateway project sucessfully going through and additionally having Enbridge commit to processing all of their crude at the new Kitimat refinery.....isn't the whole idea of the NGP to ship cheap dirty oil to China to be refined there?

Not to mention that the Enbridge Northern Gateway Pipeline;if approved, will have been in operation 3 yrs prior to the refinery opening its doors.

I'm with Sine Nomine on this one....This has the stink of spin to it.

There are billions to be made with the pipeline so cant rule anything out. say the public likes the idea then enbridge deverts a small amount to a refinery sends the rest to china could be a win win for them. But your never going to see all the product refined here. Plus the full amount would still be shipped out while a scaled down refinery is built. In the end its a PR job looking for opinion and change of heart from the public we still have all the risk.

Sounds like complete spin to me. Like others have said, the purpose of the proposed pipeline is to get the crude to port so that it can be shipped and refined elsewhere. China is not interested in buying refined fuels, they want the crude. So the question then becomes, who will supply this refinery with crude if it is all destined for China? If China was interested in the refined product, I suspect it would make no sense to build a pipeline across half of Alberta and BC and refine it near Kitimat. It's probably better to just build a refinery 15KM from the tar sands and refine it there.

The only way this proposal passes the smell test to me is if the product is actually destined for the Canadian market but even then it makes no sense because the demand is in Eastern Canada so it would be pure idiocy to build the refinery near Kitimat.

A newspaper baron building a refinery? Why wouldn't big oil do it if there was such demand?

Does Enbridge own the oil going through the pipeline. I doubt it. I suspect that it is owned by the Oil Companies that produce it in Alberta. So has Black got the OK from all the oil companies to process their oil.???

This sounds like another big horse s..t story to me. Much like the Railway to Alaska, the Rocky Mountain Trench project, and of course the huge meat packing plant for pigs, and beef in the Vanderhoof area, and dont forget the Pulp Mill that was going to be built in Vanderhoof when Alcan was pushing for Kemano Two.



Shipping oil long distances to refineries located near ports is nothing new. The worlds largest plants operate this way.
This man deserves serious credit for putting forth proposals as a private business entity. Instead of whining with no solutions, he is willing to put billions on the line for job creation that will process a canadian resource into much needed products. The orient isnt canada's only customer in this situation, the U.S.'s oil reserves are depleted badly and they have massive hydrocarbon loading/offloading facilities up the pacifac coast. This project would eliminate the need for the KeytoneXL pipeline and provide the US the option of buying refined fuels. Our resource=our jobs.

Additionally building a refinery close to the source of this magnitude makes no sense, there are too many products to ship...There are numerous grades of diesels and gasolines that are blended on site to the customers needs. You would have to run 8 pipelines to the export facility across Alberta and BC.

I agree with oil...look at the refineries in the States, they are all along the coast. Vancouver has a refinery, how far is that away from the oil sands. Most of the large US refineries that our oil goes to are along the Gulf Coast of Texas

Before we rip Mr Black a new one, give him some credit for a compromise solution between the ones that want no pipeline, no jobs and living on solar power and those who want to " log it, burn it, pave it" and F*&^ the environment.

And it sure as heck creates more jobs than the 100 Enbridge promises, 3 000 jobs in the Northwest would kill their unemployment problems and if they bring the First Nations into it, reduce the cycle of dependence that so many people on this board complain about

This will help keep these jobs on Canada

Build it in Alberta! Doesn't he know the NDP are getting in next spring?!

Classic divide and conquer tactics. Enbridge already has customers for the oil to be carried by Northern Gateway. There is no need for the refinery except as a way to get Northern Gateway. Slick. Dishonest. Classic Conservative tactics.

This is all for Enbridge and export from Canada - read his press release - http://kitimatclean.ca/press-releases/

These are some excerpts from it -

“The refinery will have the capacity to process all of the output of the planned Enbridge Northern Gateway pipeline.”

“The refined fuels will be piped forty kilometers south of the Dubose property to a marine terminal site on the Douglas Channel. Enbridge currently plans to use this site as its proposed crude oil shipping terminal.”

“First, the refinery removes the threat of offshore pollution from a heavy crude oil spill. Transportation of refined fuels is much safer. Gasoline, kerosene and diesel all evaporate. No extensive remediation would be required if there ever were an accident.”

For the rest check the link. Again this is not for Canadian markets.

And we still have a pipeline to leak and destroy our environment. No thank you.

I almost forgot my favourite part -

Another excerpt -

"Building an oil refinery requires a massive amount of labour. Canada’s labour rates normally rule out the construction of a refinery here. The capital costs become so high that the refinery is uncompetitive with others around the world. But if the refinery location is on tide water much of it can be built offshore in large modules using many different suppliers in lower cost areas of the world, thereby speeding up the construction period a great deal and reducing capital costs hugely. Kitimat has that advantage. Even so the capital cost is estimated at $13 billion. While that will still be higher than in a country like China, the capital cost per barrel will be competitive because the Kitimat refinery will be so large. It will be among the top ten in the world."

He plans to buy the refinery Lego style off shore and assemble it on site. So much for Canadian construction jobs.

Shipping oil long distances to refineries located near ports is nothing new. The worlds largest plants operate this way.

===========================================
Truer words have never been spoken but they are only words. However this guy sounds like an Enbridge puppet.
Cheers

The refineries in California, Houston Texas, and other places on the coast in the USA are there to process oil coming in from around the world, and to supply the US market. You cant compare these refineries to one that does exactly the opposite.

The Countries with the lowest costs, and the smartest managers will get these refineries. I think this leaves us out of the picture.

Well this fixes two of the three major hurdles of the Northern Gateway pipeline.

1. We can reap the benefit of a value added resource.

2. It lessens the damage of a tanker spill off the BC coast, as the refined product will be lighter and will float aiding in cleanup of the inevidable spill.

3. However it still does not fix the problem of a pipeline leak of a heavy oil into any of our lakes and streams across British Columbia.

I think heavy oils should not be transported, perhaps an environmental law reflecting that is required. Enbridges own Kalamazoo spill in Michigan is the evidence of this. Heavy oils should be refined at or near source for safer transport.

Palopu those refineries export a lot of refined product. Some of that refined product is Canadian sourced oil.

Shipping refined product from inland refineries will involve more than two pipelines. For all you folks that don't like pipelines that does not make much sense.

Tankers have sailed the BC coast for decades.

It's not the pipelines I don't like, its the raw commodity export and the too dangerous for transport product that I am against. Just like raw logs exported is wrong in my opinion same goes for the raw ore product out of Thompson Creeks Mt Milligan Project. They all leave Canada with the least amount of gain for Canadians.

I am not a miner nor am I in the oil industry but, I am a logger that is against raw log export even tho as a logger I see little value personaly after the logs are removed from the truck. However, as a Canadian tax payer I very much feel the lack of value we Canadians gain by exporting anything in its rawest form. If Canada made a commtment to Canadians that value had to be added in order for export, for sure some of our exporting would slow down but, much would not and the increased monetary gain would more than offset. With all our resourses leaving the country in their rawest form Canada is sending a strong message to the rest of the world to come and get it cheap, I think they can come and get it, but for a price.

"They all leave Canada with the least amount of gain for Canadians"

That's what Canadian business and Canadian govt is all about.....themselves!

This refinery idea is laughable. If the refined products stayed in Canada for Canadians it might make sense.

13 billion to build one refinery?
But all we can come up with to build a better fuel system is a couple hundred million every 5 years or so.

I'm far from being a enviromentalist (I own a Jeep Cherokee) but come on,really.

Hundreds of posts but not once has anyone mentioned OPEC. Don't a few guys with table clothes on their heads dictate the price of oil in North America ? You know, those Saudi guys ? Get out of OPEC!

Check out his interview in the Vancouver Sun. If he is not just interested in extra sales for his newspapers and if he is serious about building a refinery why did he/it state-

“Black, who owns more than 150 newspapers in Western Canada and the U.S., made it clear he would not be investing in the refinery himself, noting even a one-per-cent stake would cost $130 million.”

http://www.vancouversun.com/business/energy/newspaper+tycoon+proposing+billion+refinery+Northern/7106304/story.html

He also states –

“I’m hoping this will jump-start a change in the debate,” he told reporters at a press conference in downtown Vancouver.“

He also admits he doesn’t have support from oil producers, financial backers, he has no partners and has not discussed the idea with potential Asian customers. He has had only brief discussions with a pair of first nations in the Kitimat area.

The CBC interviewer asks him why he is interested in building a refinery. His answer is “I don’t”, he wants to encourage the industry to do so.

[url]http://www.cbc.ca/player/Radio/Local+Shows/British+Columbia/ID/2269726096/{/url]

Read the article, listen to the interview it sure sounds like a bunch of daydreaming and smoke blowing.

If he owns 130 newspapers that means he is going broke. Newspapers are kinda like VCR's and tube tv's, nobody wants them anymore.

Just another apple in the pot to try to sweeten it a bit. I don't think Alberta will be too happy to hear about this. Personally I don't think it will come to pass because the bitumen pipeline would still have to pass through B.C. and that's what people are opposed to. Also the tanker moratorium would still have to be lifted. Don't think that will happen soon.
Perhaps he is trying to get people to think out of the box but this idea won't fly. Build the refinery in Alberta if they want to so we do't have to take the risk of that pipeline here. A multipurpose pipeline containing several smaller pipelines all bundled together might be a safer way to go. The outer pipe could contain any leaks.

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