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

Moms of those killed by illicit opioids take to B.C. Legislature in call for action

Moms Stop the Harm, a nationwide network of families who have lost loved ones to overdoses rally

Alberni wrestler heads to University of the Fraser Valley to compete

Ravi Manhas is one of 10 recruits signed to the Cascades for 2018-19

Taxing Vancouver Island

Big Read: find out which communities are paying the lowest and highest taxes on Vancouver Island

UPDATE: Construction on Hwy. 4 halted after tree crashes into traffic

Trees are being cleared along the highway between Port Alberni and the Tofino-Ucluelet junction.

VIDEO: Canadian toddler caught practising hockey skills in crib

Eli Graveline is getting praise from far and wide as the internet freaks out of cute throwback video

Canadian Syrian children’s choir not to attend festival over fears about U.S. travel

Many kids are recent immigrants from countries covered by Trump travel ban

Amalgamation fails in North Cowichan and Duncan

North Cowichan says yes, but Duncan says no

B.C. teacher ends Jeopardy! winning streak, taking home US$69,000

Ali Hasan, from New Westminster, has been gaining fans as a “one-man invasion,” says Alex Trebek

Jett Woo highlights 5 Canucks choices on Day 2 of NHL entry draft

WHL star out of Moose Jaw tabbed in Round 2

In a matter of hours, women in Saudi Arabia will be allowed to drive

Change was announced as a royal decree in 2017 by Crown Prince Mohammen bin Salman

Feds announce measures to protect endangered whale species

Canada’s Whale Initiative is part of the federal government’s $1.5 billion Ocean Protection Plan

COC session vote approves Calgary as potential host for 2026 Olympics

Scott Hutcheson, chair of Calgary’s Olympic bid corporation — called vote a positive step forward

Lawyer fired in B.C. courtroom during trial for dangerous driving causing death

Dustin Dennis Zinter was charged following November 2015 accident near Nanaimo, B.C.

Most Read