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.

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

Just Posted

(File photo)
‘Very lucky’: Two passengers, dog escape rollover crash in Saanich unscathed

Vehicle flips on Trans Canada Highway after hitting median, possibly due to ice, firefighter says

The large metal gate stolen from Muddy Valley Farm in rural Saanich on Jan. 18 reappeared less than a week later. (Muddy Valley Farm/Facebook)
Large metal gate stolen from Saanich farm makes mysterious reappearance

12-foot gate returned to Muddy Valley Farm less than a week after it was stolen

Kimberly Proctor, 18, was murdered in 2010. Her family has spent many of the years since pushing for a law in her honour, that they say would help to prevent similar tragedies. (Courtesy of Jo-Anne Landolt)
Proposed law honouring murdered Langford teen at a standstill, lacks government support

Ministry of Mental Health and Addictions has concerns with involuntary detainment portion of act

Langford and Vancouver Island Economic Alliance are partnering to provide local businesses with one-year Island Good memberships. (Courtesy of Vancouver Island Economic Alliance)
Langford offering local businesses free Island Good membership

Island Good label helps consumers identify local products

The speculation and vacancy tax raised about $1.21 million in Sidney and North Saanich combined. (Black Press Media file photo).
North Saanich and Sidney property owners paid $1.21 million in speculation and vacancy tax

Speculation and vacancy tax raised 6.5 million in Greater Victoria

Thursday, Jan. 28, 2021 is International Lego Day. (Jenna Hauck/ Chilliwack Progress)
Unofficial holidays: Here’s what people are celebrating for the week of Jan. 24 to 30

Lego Day, Talk Like a Grizzled Prospector Day and Puzzle Day are all coming up this week

A video posted to social media by Chilliwack resident Rob Iezzi shows a teenager getting kicked in the face after being approached by three suspects on Friday, Jan. 22, 2021. (YouTube/Rob i)
VIDEO: Security cameras capture ‘just one more assault’ near B.C. high school

Third high-school related assault captured by Chilliwack resident’s cameras since beginning of 2021

FILE - In this Feb. 14, 2017, file photo, Oklahoma State Rep. Justin Humphrey prepares to speak at the State Capitol in Oklahoma City. A mythical, ape-like creature that has captured the imagination of adventurers for decades has now become the target of Rep. Justin Humphrey. Humphrey, a Republican House member has introduced a bill that would create a Bigfoot hunting season, He says issuing a state hunting license and tag could help boost tourism. (Steve Gooch/The Oklahoman via AP, File)
Oklahoma lawmaker proposes ‘Bigfoot’ hunting season

A Republican House member has introduced a bill that would create a Bigfoot hunting season

Economic Development and Official Languages Minister Melanie Joly responds to a question in the House of Commons Monday November 23, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Federal minister touts need for new B.C. economic development agency

Last December’s federal economic update promised a stimulus package of about $100 billion this year

FILE - In this Nov. 20, 2017, file photo, Larry King attends the 45th International Emmy Awards at the New York Hilton, in New York. Former CNN talk show host King has been hospitalized with COVID-19 for more than a week, the news channel reported Saturday, Jan. 2, 2021. CNN reported the 87-year-old King contracted the coronavirus and was undergoing treatment at Cedars-Sinai Medical Center in Los Angeles. (Photo by Andy Kropa/Invision/AP, File)
Larry King, broadcasting giant for half-century, dies at 87

King conducted an estimated 50,000 on-air interviews

Comox Valley RCMP are looking for witnesses after the theft of a generator worth thousands of dollars. Photo supplied
RCMP asking Vancouver Island residents to watch for stolen generator

Vehicle may have been travelling on Highway 19

Terry Keogh, an RDN Transit driver, used his paramedic skills the morning of Jan. 22 after coming across an unconscious woman along his route in downtown Nanaimo. (RDN Transit photo)
Nanaimo transit driver stops his bus and helps get overdosing woman breathing again

Former EMT from Ireland performed CPR on a woman in downtown Nanaimo on Friday

Chief Public Health Officer Theresa Tam speaks during a daily briefing in Ottawa. (THE CANADIAN PRESS/Adrian Wyld)
31 cases of COVID-19 variants detected in Canada: Health officials

Dr. Theresa Tam made announces 13 more variant COVID-19 cases in Canada

Daily COVID-19 cases reported to each B.C. health region, to Jan. 20, 2021. Island Health in blue, Northern Health green, Interior Health orange, Vancouver Coastal in red and Fraser Health in purple. (B.C. Centre for Disease Control)
B.C.’s COVID-19 infection rate stays stable with 508 cases Friday

Vaccine delivered to more than 110,000 high-risk people

Most Read