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

Courtenay Nissan’s Matthew Bourassa, Geoff Piper and Sean LaFleur join YANA’s Ashley Smith, Kelly Rusk and Lisa Wilcox for the 4x4x48 event to raise funds. Photo by Mike Chouinard
Courtenay Nissan eats and runs for YANA

Dealership realized non-profit groups need new ways to raise funds during COVID

Rev. Sulin Milne at St. Peter’s Anglican Church in Comox is part of those helping distribute food to those in need within the town. Photo by Jim Peacock
Comox church serving the community with food through COVID-19

“We knew there were so many people who were facing economic challenges …”

Cole Moore with one of his sisters, Jasmin Moore. Photo supplied
Courtenay man looks to brain surgery for second chance

Cole Moore’s sister sets up GoFundMe to help father looking after brother

Comox Valley RCMP had access to 20 Street blocked off between Cousins and Choquette avenues as they conducted a raid of a house on the block. Photo by Terry Farrell
Nineteen people arrested, charges expected in Courtenay house raid

Investigators are continuing to comb through evidence seized

Demonstrators gathered Friday, March 5 at the Courtenay Court House, demanding protection of old-growth forests. Scott Stanfield photo
Concerned citizens march in Courtenay in name of old-growth rainforests

The Comox Valley is one of the B.C. communities engaged in mobilization… Continue reading

The James C Richardson Pipe Band marches in a Remembrance Day parade on Nov. 11, 2019 in Chilliwack. Wednesday, March 10 is International Bagpipe Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of March 7 to 13

International Bagpipe Day, Wash Your Nose Day and Kidney Day are all coming up this week

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Victoria man Brett Andersen is asking for people’s help to secure him one of eight free tickets to the moon. (Screenshot/@brettandersen Instagram)
Victoria man wants your help securing a free ticket to the moon

Japanese billionaire offering eight people a trip to the moon

The Conservation Officers Service is warning aquarium users after invasive and potentially destructive mussels were found in moss balls from a pet store. (BC Conservation Officers Service/Facebook)
Aquarium users in B.C. warned after invasive mussels found at pet store

Conservation officers were told the mussels were found in a moss ball from a Terrace pet store.

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Donald Alan Sweet was once an all star CFL kicker who played for the Montreal Alouettes and Montreal Concordes over a 13-year career. Photo courtesy of Mission RCMP.
Ex-B.C. teacher who was CFL kicker charged with assault, sexual crimes against former students

Donald Sweet taught in Mission School District for 10 years, investigators seek further witnesses

(Black Press Media files)
Medicine gardens help Victoria’s Indigenous kids in care stay culturally connected

Traditional plants brought to the homes of Indigenous kids amid the COVID-19 pandemic

During a press event on March 6, Const. Alex Berube, media relations officer for the West Shore RCMP, addressed a deadly shooting that occurred in Metchosin the night before. (Devon Bidal/News Staff)
VIDEO: One man shot dead in ‘targeted incident’ in Metchosin

Highway 14 reopens following multi-hour closure for investigation

Personal protective equipment is seen in the COVID-19 intensive care unit at St. Paul’s hospital in downtown Vancouver. THE CANADIAN PRESS/Jonathan Hayward
$16.9 million invested to improve worker safety, strengthen B.C.’s food supply chain

Money to be used for social distancing, personal protective equipment, cleaning, and air circulation

Most Read