David Black said he believes he can recruit Canadian lenders to finance part of the cost of his proposed oil refinery project.

David Black said he believes he can recruit Canadian lenders to finance part of the cost of his proposed oil refinery project.

Oil refinery plan needs Canadian lenders

David Black says Chinese bank wants him to find 25 per cent at home

B.C. businessman David Black has been forced to seek Canadian lenders to build his proposed oil refinery near Kitimat at the insistence of the Chinese bank that would act as the main financier.

The Industrial and Commercial Bank of China declined to fully finance the $25-billion project, Black said, sending him to find a quarter of the required money within Canada.

“It really came down to the fact that they wanted some skin in the game out of Canada and they would put 75 per cent of the money up for the refinery,” he said Monday.

Black has billed the project, announced a year ago, as a way to create thousands of jobs in B.C. refining Alberta crude oil while ensuring diluted bitumen isn’t shipped in tankers, eliminating one of the biggest objections to construction of the proposed Northern Gateway pipeline that could supply the crude.

Black is advancing the project through his firm Kitimat Clean Ltd., but is also majority owner of the Black Press group of community newspapers, which include this paper.

He said he believes he has found lenders in Canada but gave no details, except to say he does not intend to take on equity investors.

“It’s too early to say where or how, but I think it’s there,” he said. “Financially, it’s going to work out.”

He aims to file a project description with the provincial government in September to initiate the environmental review process.

None of the major North American oil companies have expressed any interest in financing or partnering on the refinery but Black said that’s no surprise.

Oil extraction is traditionally more profitable than refining, he said, and the biggest energy firms may not want a new refinery competing against ones they already own.

“I understand all that and decided early on I just had to find a way around that and I think I’ve found it.”

The $25-billion cost includes roughly $16 billion for the refinery – more than initially estimated due to a new refining process that promises to emit half as much greenhouse gas – with the rest covering a natural gas pipeline, a fleet of tankers and the cost of the oil pipeline, if necessary.

Besides securing financing, Black said he must secure sites for the refinery and the marine terminal with the Kitselas and Haisla first nations, determine if inland first nations along the proposed pipeline corridor can come on board and to button down formal supply agreements with Canadian oil companies.

He said an engineering firm from Calgary has endorsed the alternative refining process.

Black reiterated his position that he could build the refinery even if the Enbridge’s Northern Gateway pipeline project is rejected and instead bring oil via train, but he emphasized pipelines are safer.

“I really hope it doesn’t come to that – I really hope we can do the pipeline.”

A pipeline would bring money and benefits for first nations and local communities that wouldn’t come with rail shipments, he added.

Oil-on-rail shipments have been growing quickly as a way to get Alberta oil to market, but a pall was cast over the method last month when a runaway train carrying light crude oil exploded and destroyed the heart of Lac-Mégantic, Quebec.

Black said it’s not clear to him whether there would be a risk of explosion with the rail shipment of diluted oil sands bitumen, but said he would welcome research to address that question.

Sending the required oil by rail would add 12 trains per day on the CN Rail line across northern B.C. and Black said that would mean a significant increase in noise and traffic disruption in northern towns.

Just Posted

Jacqueline Pearce and Jean-Pierre Antonio received the BC Historical Federation Best Article Award on Saturday for their story about translating haiku written in the Tashme internment camp.
Article chronicling haiku in Japanese internment camp near Hope wins award

Tashme Haiku Club’s work was preserved and recently translated, authors write

Kindergarten kids from Evans elementary school in Chilliwack painted rocks with orange hearts and delivered them to Sto:lo Elders Lodge recently after learning about residential schools. (Laura Bridge photo)
Kindergarten class paints rocks with orange hearts in Chilliwack for local elders

‘Compassion and empathy’ being shown by kids learning about residential schools

Chilliwack potter Cathy Terepocki (left) and Indigenous enhancement teachers Val Tosoff (striped top) and Christine Seymour (fuchsia coat), along with students at Vedder middle school, look at some of the 500-plus pinch pots on Thursday, June 10 made by the kids to honour the 215 children found at Kamloops Indian Residential School. (Jenna Hauck/ Chilliwack Progress)
Chilliwack students make hundreds of tiny clay pots in honour of 215 Indigenous children

‘I think the healing process has begun,’ says teacher about Vedder middle school project

Image by Free-Photos from Pixabay
Webinar looks at sexual abuse prevention among adolescents

Vancouver/Fraser Valley CoSA hosts free online session on June 15

Emergency services were on the scene of an apparent stabbing Friday afternoon (June 11) in the 2400 block of Countess Street in Abbotsford. (Photo: Kaytlin Harrison)
Two suspects arrested after apparent stabbing in Abbotsford

Incident occurs Friday afternoon in 2400 block of Countess Street

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Indigenous Services Minister Marc Miller is seen during a news conference, Wednesday May 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Indigenous child-welfare battle heads to court despite calls for Ottawa to drop cases

Feds are poised to argue against two Canadian Human Rights Tribunal rulings

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: B.C. family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from B.C. residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

Most Read