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.

Surrey North Delta Leader

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Surrey-Langley SkyTrain extension faces potential delays due to COVID-19

Pandemic ‘adversely’ impacting TransLink’s finances; ‘much work’ required to approve next investment plan

SIMPSON: For real leadership amid crisis, look west of Scott Road

Delta council, under direction of Mayor George Harvie, defines leadership during pandemic

PHOTOS: Loved ones reunite at Peace Arch Park ‘oasis’

Officials closed the park in mid-March over coronavirus concerns

Cloverdale businessman funds wells in Cambodia

Revive Washing in Clayton Heights donates three per cent of profits to charity

Cloverdale youth pastor’s sexual-assault sentencing delayed

Samuel Emerson due to return to Surrey Provincial Court in August

Mission prison COVID-19 outbreak ends, 9 new cases in B.C.

New positive test at Port Coquitlam care home

Facing changes together: Your community, your journalists

We’re asking you to lock arms with us, as we look to better days ahead

VIDEO: Humpback whales put on quite a show

The ‘playful’ pod lingered by a Campbell River tour operator’s boat for quite some time

Getting hitched at historic B.C. gold rush town still on table during COVID-19 pandemic

Micro-weddings, online visits, offered at Barkerville Historic Town and Park

VIDEO: Police look for suspect seen tripping elderly woman in Burnaby

The elderly woman was walking near the SkyTrain station when she was randomly tripped

Chilliwack teachers, assistants concerned with lack of PPE guidelines ahead of school reopening

As schools get ready to open, many worry measures won’t be enough to protect students from COVID-19

Revelstoke woman finds welcoming letter on her Alberta-registered truck

There have been multiple reports online of vandalism to vehicles with Alberta licence plates

Spirit bear possibly spotted in West Kootenay

A local resident spotted the white-coloured bear while on an evening trail run near Castlegar on May 27

B.C. businesses ‘can’t shoulder burden’ of COVID-19 sick pay

Trudeau’s plan should be tied to federal emergency aid

Most Read