Canada west coast refinery project ‘has merit’ – govt report

19 March 2013 19:51  [Source: ICIS news]

TORONTO (ICIS)--A proposal for a 550,000 bbl/day grassroots export refinery on Canada's west coast in Kitimat, British Columbia, “has merit and should be seriously considered”, according to a government report published on Tuesday.

Canadian media entrepreneur David Black proposed the project last year. The refinery would process heavy oil and bitumen shipped in from Alberta. The refined fuels would be exported to China and elsewhere in Asia.

The British Columbia government said that the report on Black's project advanced the province's “knowledge of and position as a safe and reliable jurisdiction for potential manufacturing and shipment of heavy oil”.

It did not say what steps it would take next, if any, to support the development of the project.

However, earlier this month, British Columbia’s premier, Christy Clark, lauded Black’s project as “a credible proposal from a credible British Columbia businessman”.

The refinery would, if realised, be the largest single private-sector investment in the province’s history.

Black argues that his project would be an environmentally safer alternative to the proposed Northern Gateway pipeline project, which would export unprocessed heavy oil to Asia.

Environmentalists are opposed to Northern Gateway because of the risks of shipping heavy oil in British Columbia's sensitive coastal waters. Refining the oil at Kitimat would result in tankers carrying lighter products, which are easier to clean up in case of a spillage, according to Black.

The proposed refinery and Northern Gateway are part of Canada’s efforts to find new outlets for its oil.

Canadian oil firms, as well as Canada’s federal and the Alberta provincial governments, are anxious to reduce the country’s dependence on energy exports to the US, especially as the US is ramping up oil and gas production and could soon emerge as a major energy exporter, rather than an importer.

Adding to Canadian worries is the continued uncertainty over whether the US will finally approve the long-delayed 1,900km Keystone XL pipeline. Keystone would transport supplies of western Canadian crude to US Gulf Coast refineries.

Meanwhile, Canadian energy firms have also proposed investing in west-to-east pipeline logistics to supply refiners in Quebec and other eastern Canadian provinces with oil from Alberta, replacing the more expensive Brent-priced crude they currently import to run their plants.

By: Stefan Baumgarten
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