The owner of this B.C. ghost town wants to make it a Canadian energy hub

The owner of an abandoned mining town on the north coast of B.C. is trying to seize the moment of Canada’s energy ambitions as well as recent warming relations with India to win governments over to his vision for the remote outpost.

Krishnan Suthanthiran, an Indian-Canadian engineer and medical-products entrepreneur, bought the town of Kitsault, 140 kilometres northwest of Prince Rupert, for around $7 million in 2005. Since 2013, he has been campaigning to bring a natural gas pipeline to Kitsault to join in on Canada’s energy-export rush. Now, he suggests twinning that with an oil pipeline.

At first, Suthanthiran’s Kitsault Energy focused on liquefied natural gas, but later suggested converting the gas into liquid butanol, an alcohol-based solvent that can be used as transportation fuel, which would be exported to India.

Now, after Alberta’s agreement with Ottawa for a possible new bitumen pipeline to the coast, he sees an opportunity to create a “dedicated pipeline corridor” to Kitsault, and he has issued an open letter to Prime Minister Mark Carney and Alberta Premier Danielle Smith asking them to get on board.

“What we’re trying to say is that we want to bridge the needs of India with the needs of Canada and then create tens of billions of dollars in tax revenue and create lots of jobs,” Suthanthiran said in an interview from Coimbatore, India.

He added that he has met with officials from India’s Ministry of Petroleum and Natural Gas and Indian Oil Corp., where he said he has found interest in the idea.

Trying to attract attention in Canada, however, has been more of a battle.

“Literally, 13 years and I haven’t got any attention from anybody,” Suthanthiran said. “So, we’re continuing to put forward our proposal (to) do our pipeline.”

Recently, he has been trying to reach Smith’s office, and the prime minister’s major projects office, “but I can’t get anybody to respond.”

Alberta-based energy expert Richard Masson said he has heard of Kitsault, but “it certainly hasn’t come up around Calgary much.”

Masson recalled that Smith has talked about three options for a B.C. terminal — Kitimat, Prince Rupert, and Roberts Bank in the Lower Mainland.

“They didn’t mention (Kitsault) at all as even being on the list of something to assess, which says something from at least an oil point of view,” added Masson, an executive fellow at the University of Calgary’s school of public policy.

Masson is also skeptical that Alberta will find enough private-sector buy-in by the federal government’s July 1 deadline for the kind of investment that would be needed for a new bitumen pipeline.

He said tolls, the cost for oil shippers to use, and Trans Mountain’s expanded pipeline are already at the edge of what producers are willing to pay.

“I don’t think there’s any realistic pipeline proposal coming any time soon,” Masson said.

In the natural gas sector, Masson said the major companies that could take on such a project are already busy.

“To look at location, I wouldn’t discount (Kitsault) completely as a viable location,” Masson said.

Kitsault has a deepwater port, it is in a sparsely populated area, and the Nisga’a Nation-led Ksi Lisims LNG proposal is on the same Observatory Inlet, which is already slated to bring shipping traffic to the region.

“It’s just a question about which producers might be able to partner with to make it happen,” Masson said. “And generally, a lot of the producers are probably pretty engaged already.”

The Haisla Nation-led Cedar LNG project at Kitimat is under construction. LNG Canada is close to making a final decision on whether to double its 14 million a tonnes of LNG production in Kitimat. And a decision is near on Ksi Lisims, a 12 million tonnes a year gas plant proposed for Pearse Island, 85 km southwest of Kitsault.

“It’ll be easier to incrementally expand those projects, because you get better economics than trying to build something from scratch,” Masson said.

Suthanthiran, however, remains undeterred and has arranged a promotion tour that will take him to Calgary later this month, then Prince George’s B.C. Natural Resources Forum, and Seattle after that.

Kitsault was built in the late 1970s and early 1980s by the mining firm Amax of Canada as a company town for a nearby molybdenum mine. The mine, however, only operated for 18 months before it was forced to close when prices crashed. Its 1,200 residents turned off the lights and walked away in 1983.

Suthanthiran said he spends about $2 million a year of his own money on maintenance to keep Kitsault’s buildings and facilities, including 90 houses, apartment buildings, curling rink and the Maple Leaf Pub, functional for future use.

“I have been persistent for 13 years,” Suthanthiran said. “Most of the companies have come and gone. I’m still here.”

depenner@postmedia.com

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