Cameron Orr
Kitimat/Northern Sentinel
Kitimat Clean President David Black said the response in Japan and China, to his Kitimat-based refinery proposal, was positive and his critics in Alberta are growing more silent.
Black, also Chairman of the Black Press newspaper chain, travelled to Tokyo and Beijing, in late October and early November, to pitch his refinery plan to about a dozen companies.
Each company, Black said, asked for more information and one is planning a trip to Canada in December for further discussions.
“It was all pretty positive,” Black said.
“Everybody was interested, everybody wanted more information and not one of them said ‘well, no, we’re not interested.’”
Each company also inquired about the potential to invest in the proposed refinery.
Black said there are opportunities for minority stakes but explained he would want to keep the company controlled in Canada.
Black said he’s baffled by early critics to the plan who argued Asian markets didn’t want to import refined fuels.
“That’s what [John] Horgan and others said, I never understood where they got that information from,” Black said.
“There’s a big market in refined fuel.
“In fact it was the single biggest export from the United States last year.
“They sold $88 billion in refined fuel.”
While Black plans to visit other countries, including Korea, he said Japan and China both have strong reasons for getting behind a Kitimat refinery.
In China the reason is fairly straight-forward; they need more oil each year.
They could build their own refineries or get it from Canada, with the latter being the cheaper option and better for the environment, Black said.
Currently, China burns coal to fuel its refineries.
“So if they let us build a refinery instead, they don’t have the same pollution issue,” Black explained.
The situation in Japan is a bit more unique.
Japan is currently over capacity for refinery production, but the changing supply of oil means they have serious investments to make in the future.
“The world is moving to heavier oil,” Black said.
“The supplies of light oil have been going down about three per cent a year so more and more refineries are having to put in coking equipment so they can handle heavier oil.
“In Japan’s case, they’re going to have to put a lot of money into their refineries, why not come over here, buy into a new Kitimat refinery, and bring the refined product back to Japan and land it there cheaper than they could produce it?”
He also said Japan’s tight energy infrastructure could be loosened by shutting down some of their existing refineries, shifting their supply from a Kitimat refinery.
“Sure enough there was a lot of interest [for that],” he said.
Interest continued to grow, not just from Asia.
He said he had a recent meeting with a North American company interested in the refinery to supply diesel.
Meanwhile he said the plan’s critics have for the most part been coming around.
Black countered criticism that the oil could just be refined off the Gulf of Mexico in Houston, Texas, by pointing to a cost analysis which showed that incorporating all the extra transport costs meant the product would cost an extra $20 per barrel.
“They’re in the wrong ocean,” he said.