Report calls Kitimat refinery viable
The B.C. government has released its own independent report on a proposed heavy oil refinery near Kitimat, which concludes that the project has "economic merit."
The report, by California-based Navigant Consulting Inc., examined the proposed refinery design and also assessed markets for refined fuels in Asia.
"Such a refinery would provide incremental long-term benefits to the region, compared to export of unfinished feedstock," the report states.
(See top link here to download the full report.)
The consultants recommend that B.C. approve a design for the plant that produces a variety of fuels, including gasoline, diesel and jet fuel. The report endorses a conventional design for the refinery, proposed by Victoria newspaper publisher David Black last summer.
Black, owner of Black Press Ltd., established a separate company called Kitimat Clean Ltd last year. In early March he announced that he is finalizing details for $25 billion in financing and purchase agreements for the gasoline, diesel and jet fuel that the plant would produce.
According to Black's plans, the $16 billion refinery would require another $9 billion in construction, including six product pipelines to Douglas Channel to load ships with refined fuel, and a natural gas pipeline to run a power plant, fire refining equipment and supply hydrogen for a new heavy oil refining process.
Energy Minister Rich Coleman said the Navigant report cost $40,000, and would be done by the province for any proposal of this scale, through the province's major projects office. If built as planned, the Kitimat refinery would be the biggest private investment in B.C. history.
The Navigant report describes a conventional coking process that extracts a coal-like byproduct from heavy oil. Black announced March 6 that his team is revising its environmental permit application to use a new process that would convert the coke and increase liquid fuel output.
A conventional refinery of that size would fill 100 rail cars per day with petroleum coke, which is typically sold as fuel for high-temperature metal processing.
A process patented last year by Calgary-based Expander Energy adapts a technique developed a century ago in Germany to convert coal to synthetic fuels.