[Ottawa]

Here's an update on one of the big one's...

Published 2007-01-03 | Page C1
Irving Oil will decide soon if second refinery is going ahead
Sandra Davis
Telegraph-Journal

There are still two major hurdles to be cleared, but 2007 could be the year planning starts in earnest to pave the way for a second oil refinery in Saint John.

The first step is for officials to decide, early this year, whether to go ahead and seek permits to build the facility near the Canaport liquefied natural gas terminal at Mispec Point.

A number of environmental, feasibility, socio-economic and market studies are underway, says refinery spokeswoman Jennifer Parker.

After that, a group of senior executives will recommend whether to pursue permitting applications with the provincial and federal governments.

"Making that decision is the next big milestone for us," said Parker.

The permitting process generally takes between 18 and 24 months, but depends totally on government time lines, she said.

Finding a partner is the other big hurdle the company must clear, and that's on top of ensuring the project is feasible and the right one for the market, said Parker.

Irving is in talks with several energy firms, but has declined to say which ones.

"One thing we are doing is meeting with people in business, in the community and in education and training sectors, even though these are very early days and no decisions are made yet," said Parker.

The purpose of the sessions, she said, is to talk about what can be done to make sure people are ready in terms of training and to ensure they understand the project, its benefits and how it could affect them.

Irving Oil announced in October that it was considering building a second refinery and has said the mega project would create 5,000 construction jobs during the building stages, 1,000 permanent full-time jobs at the refinery, and more jobs as the economy grows in the city. Tradespeople would have to be educated to fill the positions and the city would also have to be prepared to educate people for the spinoff jobs including lawyers, doctors and accountants.

The proposed 300,000-barrel-a-day refinery would cost between $5 billion and $7 billion. It would increase the barrels of oil processed a day in the Port City to 600,000 and would position Irving Oil among the most influential energy companies in North America.

While Irving Oil is cautious about whether the project will proceed, it has already purchased 3,000 acres in the Red Head area; a new refinery would require 400 to 500 acres.

The existing Saint John refinery is already the largest in Canada. As it stands, the region imports more than one million barrels of oil per day.

The addition of a second refinery is aimed at providing transportation fuels to the U.S. northeast market, a region that consumes 1.7 million barrels a day of various fuels.

The estimate for the multiplier effect of a second refinery on investment in energy projects has been said to be roughly $1.40 in spinoffs for every dollar in capital investment.

Building it would also have a significant impact on the province's exports, which stand at more than $10 billion, export experts have said. The project has the backing of both the provincial and federal governments.

The best-case scenario for Irving Oil would see construction start by 2009 and finish by 2012.

"It is early days but we are very excited about what the project could mean for Saint John," said Parker.

The project would be the first new major oil refinery built in North America in 25 years.