Media mogul close to $25B Kitimat, B.C. refinery deal

A B.C. media mogul says he is very close to inking a deal to build a massive new crude oil refinery in Kitimat.

Speaking to business leaders at the B.C. Chamber of Commerce in Vancouver, newspaper publisher David Black said he plans to sign a memorandum of understanding within a month with a major investment firm for the $25 billion project.

"This refinery project, I believe, will be seen as the best business project of the century by the time it's done," he said.

The plant, to be built north of Kitimat, would refine oil from the Alberta oilsands shipped either by pipeline or rail.

Black says he's teamed with Oppenheimer Investments Group,a Switzerland-based firm,to raise the funds to proceed.

Theoriginal $13 billion price tag of the refineryitselfhas risen to $16 billion with the choice toimplement newtechnologies to reduce greenhouse gases, and other costs with the project bring the total capital investment to $25 billion.

Black told the B.C. Chamber of Commerce the extra $3 billion cost for the refineryis due to plans to use a newly-patented"cleaner" approach to processing heavy oil.

"We will be the first in the world to use it. All other heavy oil refineries use coking equipment. Our consultants estimate [the] Fischer-Tropsch [process] will increase our capital costs by $3 billion, but it will decrease greenhouse gases per barrel by 50 per cent. Our refinery will now be much, much cleaner than any other heavy oil refinery in the world," Black said.

Black said the refinerywould likely be accompanied by a $6 billion oil pipeline, a $2 billion gas pipeline, andnew oceangoing tankers that could cost an additional $1 billion, bringing the total for the project to $25 billion.

Black also said a new Mustel poll he commissioned last week found the majority of people in B.C. agree the province and Canada should add value to natural resources before exporting them.