Skip to main content

The substance, called ‘neatbit,’ right, would be ideal to transport by rail and poses much less risk to the environment than diluting the bitumen into molasses-like ‘dilbit,’ according to Pacific Future Energy executives.Jimmy Jeong/Bloomberg

Backers of a proposed B.C. refinery want to transport Alberta bitumen in solid form inside tank cars along Canadian National Railway Co.'s existing lines and convert the substance into diesel and gasoline at a site north of Kitimat.

Pacific Future Energy Corp. executives, who are seeking to export refined petroleum products to Asia, say the bitumen will be in a form that resembles peanut butter in a refrigerator. The substance, called "neatbit," would be ideal to transport by rail and poses much less risk to the environment than diluting the bitumen into molasses-like "dilbit," the executives say.

"Neatbit is a near-solid that has the consistency of peanut butter and does not flow unless heated," Pacific Future Energy said in a 120-page project description prepared for the B.C. Environmental Assessment Office and Canadian Environmental Assessment Agency. "It has very low flammability. As a result, it is exempt from Transport Canada's Transportation of Dangerous Goods Regulations and can be transported safely by rail car."

Pacific Future Energy has selected an 850-hectare site to construct the $11-billion (U.S.) bitumen refinery, choosing the Dubose Flats industrial site after eliminating options near Prince Rupert. The backers will need to negotiate permission to use the provincial Crown land, midway between Terrace and Kitimat. That land is under the legal jurisdiction of the B.C. government and is part of the traditional aboriginal territory of the Kitselas and Haisla.

Three or four trains, each with 120 railcars filled with neatbit, are anticipated to run daily on CN's rail lines, according to Pacific Future Energy's filing to environmental regulators. The Vancouver-based energy company commissioned engineering firm SNC-Lavalin Group Inc. to prepare the report.

The report by SNC-Lavalin said construction is slated to start in 2018 at the Dubose Flats site, 30 kilometres north of Kitimat. About 3,500 construction jobs are forecast over a two-year period, and 1,000 full-time refinery positions.

"The main components of the project will include a new bitumen oil refinery constructed from about 26 modules that will be manufactured and shipped via heavy-lift vessels or barges from Asia," it said.

The goal is to begin exports as early as 2021, though it would likely take until 2024 to process 200,000 barrels a day of bitumen and achieve full production of diesel, gasoline, jet fuel and butane.

Plans call for huge refinery modules to arrive in Canada via Douglas Channel. But Pacific Future Energy would enlist other firms and First Nations to build two pipelines to an export site along Portland Inlet, roughly 120 kilometres northwest of Kitimat.

"Early third-party studies suggest a marine terminal could be situated along the Portland Inlet, in the event such a development were to secure the support of a host First Nation," the report said. An estimated $1-billion will be needed to construct the two pipelines and another $1-billion for the Portland Inlet export terminal.

The refinery would incorporate cleaner technology, including using wood-waste biomass to help generate electricity. During the production process, petroleum coke would be eliminated as a byproduct. The goal is to keep emissions of carbon dioxide to a minimum.

Pacific Future Energy's team includes executive chairman Samer Salameh, chief executive officer Robert Delamar, chief operating officer Jacques Benoit, chief strategy officer Mark Marissen and chief financial officer Jeremy Friesen. Other key figures include former international trade minister Stockwell Day and two prominent aboriginal advisers, Shawn Atleo and Ovide Mercredi.

A-in-Chut Business Group, jointly owned by Mr. Atleo, has formed a joint venture with SNC-Lavalin to become the refinery project's leading investors.

The regulatory filing comes as Kinder Morgan Canada's proposed expansion of its Trans Mountain oil pipeline from the Edmonton area to Burnaby faces community and environmental opposition while Enbridge Inc.'s Northern Gateway pipeline proposal remains stalled.

Pacific Future Energy is seeking to gain an edge over rival plans, notably one touted by newspaper publisher David Black, who is hoping to forge ahead with his competing Kitimat Clean refinery venture on the Dubose Flats site. Another proposal, Eagle Spirit Energy, is striving to upgrade bitumen either in Alberta or northeast B.C. before piping the material to the West Coast for export.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe