Newspaper publisher David Black is revising his B.C. environmental assessment application for a large-scale heavy oil refinery in Kitimat to use a new refining process to reduce its environmental impact.
Black gave an update on the project to a B.C. Chamber of Commerce breakfast in Vancouver Wednesday, saying he has found most of the $25 billion in financing needed, and buyers for the refinery’s fuel products. He said customer contracts and financing are to be finalized within two months.
Black also released a Mustel Group poll conducted in February that shows three out of four people support the idea to refine crude oil in Kitimat.
A 57 per cent majority continue to oppose the Enbridge Northern Gateway plan to pipe crude to Kitimat and load it on ocean tankers. Black said rejection of pipelines would only push crude oil producers to use rail transport to reach his refinery and other buyers.
The new process makes synthetic fuels from the heavy tar left over from conventional oil refining, instead of extracting the carbon as petroleum coke as is done in Alberta and elsewhere.
Black said in an interview there are currently four other heavy oil refineries under construction around the world, two in Africa and two in Saudi Arabia. All are about the same scale as his proposed Kitimat Clean plant, processing about 400,000 barrels per day of heavy oil using “cokers” that extract the coal-like byproduct.
A refinery of that size would fill 100 rail cars per day with petroleum coke, which is typically burned for metal production and contains sulphur as well as similar carbon intensity to metallurgical coal.
Shell’s refinery at Anacortes, Wa. currently processes Alberta oil sands crude using cokers, selling the petroleum coke for aluminum refining.
The new process adds hydrogen from natural gas to combine with the excess carbon in heavy oil, increasing the amount of gasoline, jet fuel and diesel produced.
“It will be 50 per cent cleaner than any other refinery in the world,” Black said. “It’s going to cost about $3 billion more, and I’m going to organize the money for it.”
The process received a Canadian patent last fall for Calgary-based Expander Energy. It adapts a process developed in Germany in the early 1900s to convert coal to synthetic gas, which was relied on for vehicle and aircraft fuel by the German armed forces while their conventional fuel sources were embargoed during World War II.
Expander’s modified process converts bitumen, petroleum coke, biomass or municipal solid waste into gas products used to make synthetic diesel and jet fuel.
