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China bank to fund proposed West Canada refinery

04.19.2013  | 

British Columbia-based media mogul David Black has been touting what he says will be among the 10 largest refineries in the world. He envisions refining oil from Alberta's oil sands at the $25 billion facility and exporting it from the Pacific port of Kitimat, B.C., to markets in Asia.



TORONTO -- Canadian media mogul David Black said late Thursday the Industrial & Commercial Bank of China, China's largest bank by market value, has agreed to help finance his plans for a $25 billion refinery on the west coast of Canada.

The British Columbia-based businessman has been touting what he says will be among the 10 largest refineries in the world. It envisions refining oil from Alberta's oil sands and exporting it from the Pacific port of Kitimat, B.C., to markets in Asia.

Mr. Black is better known as the majority owner of closely held Black Press Group, which runs more than 150 newspapers in British Columbia, Alberta, Washington state, Hawaii, California and Ohio. But he's recently made headlines in Canada for his ambitious refinery plans.

Such a facility has been one idea floating around for years to help Canada better capture the value of its immense oil reserves. But many industry executives have said Canada would be better off simply exporting its unrefined crude to Asian markets.

At least two pipeline projects are in the works to bring Alberta crude to the West Coast, though both face stiff opposition from environmental and native groups.

Mr. Black told The Wall Street Journal last month that he is close to signing memorandums of understanding with customers for so-called off-take agreements, in which they would agree to buy products from the plant.

The ICBC commitment is the latest move by China to try to participate in a boom of energy production across North American. Cnooc snapped up Canadian oil producer Nexen last year for more than $15 billion, and other state energy and natural resources firms controlled by Beijing have pumped billions of dollars into Canadian and US assets in recent years.

Mr. Black's company, Kitimat Clean, signed memorandums of understanding with ICBC on Thursday for the Chinese bank to act as a financial adviser and "cooperate in the financing of the proposed Kitimat refinery and associated pipelines," Mr. Black said in a statement.

In an email, Mr. Black said he anticipates the Chinese bank will both help finance the project and help set up other finance.

ICBC will be working "toward a comprehensive agreement to finance" the refinery, Liu Yanping, deputy head of corporate banking at the bank and Huang Jifa, its deputy head of investment banking, said in the statement sent out by Mr. Black.

Dow Jones Newswires

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Qodrat Azima

-- It will be a fantastic project, the Crude Distillation capacity is estimated to be in the neighbourhood of 2Million Barrels per day with subtantial capacity in Catalytic Reforming - around a quarter MillionI Barrel per day and other conversion processes of similar capacities. I love to work on the refinery project...

Library Shell Global Solutions

That's best for Canada to look for overseas market for it's huge oil sands reseves and to compete in the open market. The main point is to get approval for kitimate pipelines so that this project can be put into practice. This is very good for not only to Alberta and BC but also to boost overall Canadian economy which is sort of in a grey area now a days.

Paul Sullivan

Might we see a reversal of the proposed oil flows from Canada to Texas and instead see northern US unconventional O&G flowing north over the border into Canada to capitalise on Canadian facilities???

jon pecaut

Great news for Canada. Too bad the US can not get the politics and enviromentalists out of the way so XL can be built along with the proposed refinery in South Dakota.

Nadeem Khan

This is good sign towards boost in Canadian economy. Currently Canada is in need of such refineries to capitalize it's Oil Sand deposits and to export it to asian markets instead of exporting unrefined crude. I think it will be beneficial and would aid the Canadian economy in a longer run. We hope that government will get all required approval to build the pipeline projects by the time.

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