[humble_pie]

.

there are 3 distinct BC refinery proposals for alberta tar sands oil.

in addition to the Kitimat Clean project - written up in a nearby thread - both Pacific Future Energy & Eagle Spirit Energy are competing to obtain the federal license that will give them the right to build a special refinery for alberta heavy oil. The refined product will be shipped to asia from west coast ports kitimat or prince rupert.

1) Pacific Future Energy is backed by Ovide Mercredi, Shawn Attleo, legendary first nation businessman Robert Louie, Stockwell Day, plus technology that will see alberta bitumen processed into "neatbit," a semi-solid form of heavy oil that does not flow, thus making spills from railcars impossible, or so they say.

SNC Lavalin is handling engineering infrastructure for pacific future energy. Capital to support the project is coming from several big overseas oilcos. Chinese, of course, but singapore oil interests are said to be included.

pacific future energy is not particularly forthcoming about its financial partners, so if anyone can add information here i would be grateful.

pacific future will locate its refinery just north of Kitimat.

http://www.pacificfutureenergy.com/


2) the 3rd refinery proposal is coming from Eagle Spirit Energy. This is a large group of first nations along an east/west corridor from alberta to Prince Rupert. Eagle spirit claims that every first nation across whose lands the alberta heavy oil must be transported has given its approval to the project.

financial backing is coming from vancouver's entrepreneurial Aquilini group, owner of the vancouver canucks hockey team.

Eagle Spirit says it's contemplating a refinery east of the Rockies, so that the product to be transported by pipe to prince rupert would be lighter oil, not bitumen.

supporters of Prince Rupert as the export port criticize the deep inland location of Kitimat, with its related dangers of shipping refined oil product to asia through the narrow Douglas channel. Prince Rupert, they like to point out, is located right on the pacific seacoast.

 

[tygrus]

Funny how price crash really motivates some innovation.

Patch has been lazy just wanting to extract and dump over the border. Those days are done.

 

[treva84]

.

there are 3 distinct BC refinery proposals for alberta tar sands oil.

in addition to the Kitimat Clean project - written up in a nearby thread - both Pacific Future Energy & Eagle Spirit Energy are competing to obtain the federal license that will give them the right to build a special refinery for alberta heavy oil. The refined product will be shipped to asia from west coast ports kitimat or prince rupert.

1) Pacific Future Energy is backed by Ovide Mercredi, Shawn Attleo, legendary first nation businessman Robert Louie, Stockwell Day, plus technology that will see alberta bitumen processed into "neatbit," a semi-solid form of heavy oil that does not flow, thus making spills from railcars impossible, or so they say.

SNC Lavalin is handling engineering infrastructure for pacific future energy. Capital to support the project is coming from several big overseas oilcos. Chinese, of course, but singapore oil interests are said to be included.

pacific future energy is not particularly forthcoming about its financial partners, so if anyone can add information here i would be grateful.

pacific future will locate its refinery just north of Kitimat.

http://www.pacificfutureenergy.com/


2) the 3rd refinery proposal is coming from Eagle Spirit Energy. This is a large group of first nations along an east/west corridor from alberta to Prince Rupert. Eagle spirit claims that every first nation across whose lands the alberta heavy oil must be transported has given its approval to the project.

financial backing is coming from vancouver's entrepreneurial Aquilini group, owner of the vancouver canucks hockey team.

Eagle Spirit says it's contemplating a refinery east of the Rockies, so that the product to be transported by pipe to prince rupert would be lighter oil, not bitumen.

supporters of Prince Rupert as the export port criticize the deep inland location of Kitimat, with its related dangers of shipping refined oil product to asia through the narrow Douglas channel. Prince Rupert, they like to point out, is located right on the pacific seacoast.

SNC Lavalin is involved in the project? I can betcha the bribes have already started flowing!

 

[Eder]

I doubt our Indians are going to be oil refiners... they have shown their anti Canada colors over and over.

 

[humble_pie]

suppose one of the 3 BC projects is successful. What's it going to do to TRP's Energy East project? no more alberta tar sands oil bound for the port of St John NB?

 

[olivaw]

Humble, you call it the "Alberta tar sands". Often that is a term used by those who oppose Energy East. Are you opposed to that project?

I suspect that Energy East will not overcome regulatory obstacles, particularly in Quebec. There is too much environmental opposition and very little economic incentive for approval.

The possible BC projects are more likely to gain regulatory approval but they may not be economically viable.

My two-cents from Calgary. Altared is quite knowledgeable about Alberta products. Perhaps he will see this thread and comment about the economic viability of those BC projects.

 

[mreconomic]

I am surprised I havent seen any comments on a compmany called Tecnicas Reunidas (TRE) which has been collaborating with the construction process of these pipes... There have been some overun costs due to the geographic layout... This spanish company will have to assume the extra cost at the end... so their stock price fell around 55% in a week... This project messed up all their balance sheet for 2015.

After a few weeks reorganizing their accounts, the compoany finally found a solution to all this mess, which has made the stock recover around a 25% since it hit the bottom 21€/share... I bought 1000 shares at 22€, and it has going uop since then, today opened at 28.5€ and the trend is to go back to 40€ where historiaclly has been valued...

 

[mreconomic]

great thoughts... taking into account environmental issues is what the world needs right now... sadly it is not the main concern

 

[humble_pie]

I am surprised I havent seen any comments on a compmany called Tecnicas Reunidas (TRE) which has been collaborating with the construction process of these pipes... There have been some overun costs due to the geographic layout... This spanish company will have to assume the extra cost at the end... so their stock price fell around 55% in a week... This project messed up all their balance sheet for 2015.

After a few weeks reorganizing their accounts, the compoany finally found a solution to all this mess, which has made the stock recover around a 25% since it hit the bottom 21€/share... I bought 1000 shares at 22€, and it has going uop since then, today opened at 28.5€ and the trend is to go back to 40€ where historiaclly has been valued...

interesting ... which of the 3 projects is TRE associated with? i imagine it would be Pacific Future, which is the most multinational of the 3 projects.

as i mentioned upthread, it's difficult to see exactly which global concerns are really backing Pacific Future, if anyone has any hard info to add to the pot it would be appreciated.

 

[andrewf]

Energy East was no one's first choice. It is a desperation move by an industry that got blocked to the south and west.

 

[humble_pie]

I doubt our Indians are going to be oil refiners... they have shown their anti Canada colors over and over.

tch, what kind of attitude is that .each:

folks with this attitude say that first nations have problems both on the reserves & in the big cities Because they're, well, different, like maybe difficult, maybe inferior somehow.

then when first nations succeed economically & culturally on a massive scale, like chief Louis in the BC interior or the mohawk at khanewake - or maybe any one of the 3 new refinery projects mentioned in this thread - the same folks go Oh they are doomed to failure.

 

[humble_pie]

Energy East was no one's first choice. It is a desperation move by an industry that got blocked to the south and west.

but this thread isn't really about Energy East though. It's about possible new refinery & deep port proposals in BC & alberta.

a postscript thought is that if one of the 3 daring refinery proposals actually does succeed, surely it would make TRP's energy east plan to pipe dilbit to st John NB obsolete

 

[Eclectic12]

^^^^

andrewf knows for sure .... but the wording makes me think the comments were in response to post # 6 (which didn't think Energy East would get approvals and questioned the viability of the BC projects).


Cheers

 

[humble_pie]

^^^^

andrewf knows for sure

really? somebody somewhere in canada knows for sure how alberta sands crude is going to get itself exported?

this lucky personnage will become our very own multi-gazillionnaire oil sheikh

 

[AltaRed]

My two-cents from Calgary. Altared is quite knowledgeable about Alberta products. Perhaps he will see this thread and comment about the economic viability of those BC projects.

Having just read this thread...... No, I can't say I can add much...for the primary reason the vast majority of projects/ideas never get off the ground. Most could be considered reasonable ideas to start with and that is clearly an essential ingredient to start the process.... but almost none of them ultimately have economics once the engineering firms complete feasibility studies (or if passing that checkpoint, FEED - which is Front End Engineering Design). Few of the project sponsors have the financial nor technical resources nor global staying power to survive with out a mega-multi-national at the helm. None of the First Nations have the financial resources to do anything other than have a tiny wedge of equity and only because it is 'mostly given to them' in return for land crossings. Which is fine...Enbridge and TRP are prepared to do that to get 'the nod' and that was even the case for the now defunct Mackenzie Gas Pipeline.

The problem with these schemes is they pop up to address an existing (but potentially short term) problem and when 25-30 year economics have to be considered, almost no one can see how these projects can work 25-30 years out. The best way to look at a 30 year project is to sit back and visualize where one was at 25-30 years ago, e.g. 1985-1990 in this case, and ask oneself whether they would have had a clear vision of what 2015 would look like. The simple answer is no.... so economics must be robust to begin with and pass muster under a number of scenarios that could unfold globally over the amortization period.

A case in point: The LNG projects are not getting off the ground because they were developed as a way to get depressed NG out of Canada, but at least some project sponsors forgot that LNG is priced off oil in Asia and thus when oil prices collapsed, LNG prices landed in Japan, Korea or China collapsed as well. LNG export ideas have been tried at least 3 different times off the West Coast, only to fail economically. At least they did not get built becore economic failure.

Same with Mackenzie Gas Project. Imagine if that had actually gotten built circa 2005-2010 or so. Imagine how the project sponsors would be losing their shirts today with NG in the $1-2 range. I had some involvement with that project at one time and NG had to be a lot higher pricec than that to make it work.

So goes these refinery proposals (I should call them upgrading proposals, rather than refineries) because I don't think any of them will actually make refined products. Where will the billions come from to actually finance these? At what point will the Chinese (who don't necessarily look at pure economics.....rather they consider strategic implications) wonder why they would invest billiions at a single or negative digit NPV/discounted rate of return? Clearly none of the existing sponsors have the funds to do anything more than perhaps conduct simplified feasibility studies in the millions of dollars. Proper feasability studies and FEED will cost in the hundreds of millions of dollars. It would be nice if something could pass muster economically but I am not optimistic.

P.S. FWIW, I think the Kinder Morgan (Trans Mountain) pipeline proposal is the most viable option for incremental shipping capacity....to a new market. Especially if the R's do not get the White House. If the R's do succeed, I think Keystone XL will come back to life but I am not so enthused about being even more committed to the USA, what with their whacky and unsettling political situation.

 

[humble_pie]

^^

fascinating. But don't you think, altaRed, that SNC would have completed feasibility studies before it added its name so publicly to Pacific Future?

after all, SNC is the company that built the new china tibet railroad infrastructure across thousands of kilometres of bottomless swamp & bog land. Their solution was to freeze the tundra permanently. You don't think they could handle getting alberta sands crude across BC safely?

 

[AltaRed]

Off-topic and didn't want to contaminate the prior post with this, but given hp's comments about Robert Louie, there is no question he has served his community well. He has done a fine job of unlocking value for his band through firstly being able to become a self-governing entity and thus becoming free to commericalize their land value. The rapid growth of commercial/retail and residential development on WFN lands has created wealth, albeit it is concentrated in the hands of 5 families and does not trickle down to band members at large (tribal culture). That said, they do the smaller projects quite well, but struggle with larger visions. The private hospital concept fell through and left WFN holding an $8 million bag http://infotel.ca/newsitem/westbank...-hospital-still-on-shaky-legal-ground/it22697 and that is likely because they did not have themselves covered contractually as well as they could have. Just an anecdotal example of how bigger challenges can really become nightmares.

FWIW, I still have hopes this project will succeed so that: 1) I can go there (without really leaving home) for timely hip and knee replacements and thus avoid the huge waiting lines that will get worse and worse in the public health system, and 2) it will bring millions of new dollars into our local economy so that Canadians will not have to go to the USA or Mexico or Thailand or India for medical tourism. Now back to regular programming........

 

[humble_pie]

i should add that the 3rd BC refinery proposal is Kitimat Clean, from vancouver publishing tycoon & business mogul David Black.

kitimat clean has had extensive writeup in other threads so i didn't repeat in this thread. Those writeups have vanished into the chaos that is cmf forum though.

kitimat clean proposes to ship alberta crude as neatbit by rail to a new refinery just north of kitimat.

for the record, here's a recent globe & mail piece that treats kitimat clean & pacific future. It omits the Eagle Spirit proposal, described upthread. Eagle Spirit plans to build a refinery east of the rockies & ship light, or at least lighter, oil by rail through an energy corridor to prince rupert.

http://www.theglobeandmail.com/news...inery-proposals-near-kitimat/article28207144/

 

[AltaRed]

^^

fascinating. But don't you think, altaRed, that SNC would have completed feasibility studies before it added its name so publicly to Pacific Future?

after all, SNC is the company that built the new china tibet railroad infrastructure across thousands of kilometres of bottomless swamp & bog land. Their solution was to freeze the tundra permanently. You don't think they could handle getting alberta sands crude across BC safely?

SNC's job is to firstly capture engineering work, and to then take an equity position if it becomes feasible. Feasibility work in itself is often done at 'near cost' so as to have the 'inside track' on the really potentially profitable parts of the project. Engineering companies do feasability studies on a regular basis with only a fraction of them turning into something more robust. SNC clearly has the technical ability to do almost anything but that is not the point. It is commecial viability. My experience has been that a feasibility study needs to be very robust economically because then FEED will result in much higher capex costs and project schedules, and then once the project is financed and committed, there can be further delays and more costs.

The one company in Canada that has demonstrated its ability to bring a project in on cost and budget once committed is CNRL. How they do it, I don't know, but they obviously are viscious and tenacioius in their contracting function and their project management function takes no prisoners. I admire them for their ability to accomplish that.

 

[humble_pie]

That said, they [westbank first nation] do the smaller projects quite well, but struggle with larger visions. The private hospital concept fell through and left WFN holding an $8 million bag http://infotel.ca/newsitem/westbank...-hospital-still-on-shaky-legal-ground/it22697 and that is likely because they did not have themselves covered contractually as well as they could have. Just an anecdotal example of how bigger challenges can really become nightmares.

FWIW, I still have hopes this project will succeed so that: 1) I can go there (without really leaving home) for timely hip and knee replacements and thus avoid the huge waiting lines that will get worse and worse in the public health system, and 2) it will bring millions of new dollars into our local economy so that Canadians will not have to go to the USA or Mexico or Thailand or India for medical tourism.

the partnering hospital with the medical expertise was the Massachusetts General, i believe ... merely one of the best hospitals in the entire world! i thought the concept was genius because it would offer Mass General medical treatment to canadians at home. I still think the concept is genius but can't discern from your post whether the project is dead as the dodo or whether it needs massive re-tooling from chief Louie.

meanwhile please take care of those fine but aging hips & knees, may they last long & strong as a mountain lion.