From Business in Vancouver, by Nelson Bennett
A New York investment banker told the BC Chamber of Commerce Wednesday that he has investors lined up to make B.C. press baron David Black’s $16 billion oil refinery a reality.
All in, the project would actually cost $25 billion, when pipelines – or railways – and new tankers are factored in.
Black hired Oppenheimer and Co. Inc. to arrange the project’s financing. Richard Cooke, Oppenheimer’s senior managing director for the Americas and Africa, said investors are lined up.
“We have arranged and we have the funding committed to do this whole project,” Cooke said. “David talked about a commitment of $25 billion, and the people behind us – the consortium we put together – have acknowledged that they will support that total sum.”
Located 25 kilometres north of Kitimat, the oil refinery – which Black said would be one of the biggest in the world – was originally estimated to cost $13 billion.
But in an effort to live up to the project’s name – Kitimat Clean – Black said the project would include new cutting-edge technology developed in Alberta to reduce greenhouse gas emissions, adding to $2 billion to the project’s costs.
In addition to the refinery itself, Black estimated the project would also require $9 billion in additional infrastructure:
If the $6 billion Northern Gateway pipeline is rejected, Black said bitumen from the Alberta oil sands could be brought to Kitimat by rail.
Even with the additional costs of the clean technology for the refinery, Black said it would still be more cost-competitive with others around the world because, for one thing, it is located closer to emerging markets in Asia.
The discount on North American natural gas and oil would give the project an edge, he said.
“We would be the lowest-cost producer by a mile,” Black said.
