KITIMAT CLEAN LTD. PRESS RELEASE
December 4, 2014
We are pleased to announce that Hatch Ltd, a Canadian based worldwide engineering firm, has completed its seven month design and feasibility study for the Kitimat Clean Ltd heavy oil refinery. The report, consisting of some 270 pages, provides for a robust design which will enable the refinery to process 550,000 barrels per day of diluted bitumen from Alberta into 460,000 barrels of refined fuels. With a capital cost estimated to be $22 billion the refinery will be one of the ten biggest in the world and we believe the largest single project ever constructed in Canada.
The plant will employ approximately 3,000 operations people, at an estimated payroll of $300 million dollars. Most likely a further 3,000 direct jobs will be created in nearby petrochemical plants. These new manufacturing jobs will go a long way to mitigate the ongoing loss of employment in BC’s resource industries.
All levels of government will welcome the annual tax revenue from the refinery of approximately one billion dollars. The business plan is sound because the refinery will be the lowest cost producer in the whole of the Pacific basin.
As requested by Kitimat Clean, Hatch has configured the greenest heavy oil refinery in the world. CO2 emissions are expected to be in the order of 10 million tons per year which is one-third of the 33 million tons generated by a normal heavy oil refinery producing and burning coke by-product. There is a price to be paid for this, as the Kitimat refinery will cost $5 billion more than a standard coking refinery. The plant will also incorporate the best pollution control equipment in the world to control all other emissions, there will be no waste water, and power for the refinery will all be generated internally. If this refinery is not built in British Columbia, subject to Canada’s tough environmental regulations, it will be built in Asia and likely utilize standard coking technology with the result that approximately 100 rail cars of coke will be burned daily in the atmosphere.
One of the greatest advantages of this refinery has to do with the sea. All received bitumen will be converted into diesel, jet fuel and gasoline. Since these refined products float on water and evaporate, the consequence of any spill at sea is greatly diminished. A discharge of conventional crude oil or synthetic crude oil, on the other hand, is extremely difficult if not impossible to remediate, as we have learned from the Exxon Valdez disaster. In that case conventional crude oil was spilled. After four years of effort by up to 11,000 people only 7% was recovered. A bitumen spill would be far worse as much of it would sink in coastal waters like ours and not be recoverable, and the remainder would harden up on beaches and mudflats and be impossible to remove safely.
Locating the refinery in the best spot is critical to the economics and the environment. Most of the refined product will be exported and all export refineries are built beside the sea. (It would be uneconomic to locate this refinery in Alberta for example). The advantage of choosing a site near Kitimat and Terrace is that there is no need to transport diluted bitumen by pipeline or rail along the hazardous route beside the Skeena River.
Lenders are willing to put up the money for the refinery but insist on some skin-in-the-game from Canada. Therefore Kitimat Clean is offering compensation to the federal and provincial governments to obtain their debt guarantees. The federal government has stated that it will provide conditional approval given that the refinery is nation-building at its best and the best environmental solution for the planet.
Our next steps include applying for environmental permits, agreeing with the Kitselas and Haisla First Nations on acceptable compensation for the use of their traditional territory, negotiating feedstock contracts with oil and gas producers, negotiating offtake contracts and funding with Asian participants, and completing the last phase of the engineering preconstruction work. All of this work will require two years. Construction will take an additional six years.
President, Kitimat Clean Ltd.