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British Columbia refinery plan gets lift Former high profile Canadian cabinet minister lends experience to bitumen refinery on Pacific Coasts; views project as ‘legacy’ Gary Park For Petroleum News
A former high-profile cabinet minister in the Canadian and Alberta governments has added weight to a long-shot proposal to build a refinery on the British Columbia coast to process oil sands bitumen for export to Asia.
Stockwell Day, once deputy premier in Alberta, has been announced as a senior adviser and board member for Pacific Future Energy Corp. two months after the Vancouver-based enterprise disclosed a C$10 billion plan backed by Mexico’s Grupo Salinas.
He is seen as a key participant in managing potentially contentious dealings with industry, community, aboriginal and environmental interests.
Day was emphatic that he should not be viewed as a “trophy in the window” or a conduit to government investment, insisting Pacific Future is not looking for taxpayer dollars.
However, he did not rule out signing a crude supply agreement with the Alberta government similar to one signed with the Northwest Redwater Partnership for a 50,000 bpd project near Edmonton.
Second round of funding The proponents are just entering a second round of funding commitments from private investors to take on the challenge of building the first oil refinery in Canada in three decades, with the hope of reducing objections to the tanker shipment of crude bitumen off the British Columbia coast.
Day said Pacific Future is “presenting (the scheme) to investors as a stand-alone project without government financial aid,” unlike the rival Kitimat refinery proposed by newspaper mogul David Black, who is seeking an C$8 billion government loan guarantee for a C$32 billion plan to build a refinery, a pipeline from Alberta and a fleet of tankers.
Pacific Future’s plan involves a 200,000-barrels-per-day facility, expandable to 1 million bpd, compared with Black’s Kitimat Clean venture to process 550,000 bpd. A smaller refinery has also been floated by aboriginal businessman Calvin Helin.
Pacific Future is also touting its proposal as the world’s “greenest” refinery by using advanced European refining technology to capture and store greenhouse gases.
The oil sands bitumen would be processed into gasoline, diesel, kerosene and other products that would be less harmful to the environment if there was a tanker accident.
Day said he is unhappy that the bulk of Canada’s oil production is shipped to refineries in the United States, which is turning into a shrinking market as “they approach self-sufficiency. It’s time to open up new offshore markets,” he said.
Goal to start engineering work this year Day said he is optimistic, despite the shaky economics of refinery construction, that funding can be secured to start engineering work and choose a refinery site this year, leading to a regulatory application in 2015.
He said the refinery idea appeals to him as “an exciting legacy project for Canada.”
Pacific Energy’s plans involve creating a partnership with First Nations in the Prince Rupert area.
The plan is being directed by Samer Salameh, head of the telecommunications business and new business development for Grupo Salinas, a conglomerate owned by billionaire Ricardo Salinas, with more than 100,000 employees and operations in 11 countries.
Day said he shares the concerns of British Columbians over the environmental risks posed by pipeline projects - Enbridge’s Northern Gateway and Kinder Morgan’s Trans Mountain expansion - to ship bitumen to the Pacific Coast for export to Asia.
He rejected any suggestion of a “carte blanche acceptance of an energy proposal” unless the venture can deal with legitimate issues raised by aboriginals and the concerns about the dangers posed by moving raw bitumen over land and on water.
Without “full and proper engagement” with aboriginal communities the role of potential investors is meaningless, Day said.
But he argued that Pacific Future also has the chance to create value-added job opportunities in British Columbia.
Day said the there is an economic case to be made for a refinery despite the admission by the Canadian Fuels Association, representing refiners, that the sector must overcome “low return, low growth, capital intensive, politically sensitive and environmentally uncertain” issues.
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