(EnergyAsia, April 24 2013, Wednesday) — The world’s largest bank said it will provide financing for the proposed construction of a large export-oriented oil refinery in the port of Kitimat on the west coast of Canada.
The Industrial and Commercial Bank of China (ICBC) has agreed to provide financing for the project, estimated to cost between US$15 and US$18 billion, that will likely attract the participation of Chinese state companies like Sinopec and PetroChina. Another US$7 billion will be needed for the construction of pipelines to deliver oil sands from Alberta to the refinery.
Kitimat Clean Limited, a company owned by Canadian newspaper publisher David Black, which is fronting the project announced it had signed a memorandum of understanding with ICBC.
The MOU said ICBC has agreed to “be the Chinese financial advisor to Kitimat Clean and co-operate in the financing of the proposed Kitimat refinery and associated pipelines and other elements.”
“Chinese companies will be involved in the engineering and construction of the refinery” which could export all its production to Asia.
The statement also quoted Liu Yanping, the bank’s deputy head of corporate banking, and Huang Jifa, deputy head of investment banking, as saying that ICBC will “be working toward a comprehensive agreement to finance” the refinery, which will be owned and controlled in Canada. Sinopec and PetroChina will likely trade or ship the products to Asia.
While the British Columbia government has announced its support for the project, environmental and many First Nations aboriginal groups are expected to oppose it as the increased tanker traffic could threaten the region’s pristine waterways and forests.