A cellulose ethanol project that can’t seem to get off the ground has suffered another setback.
Shell and Iogen Corp. announced in 2009 that after years of searching for a potential site to build their 180 million litre facility, they settled on the old Domtar pulp mill site in Prince Albert, Sask.
A letter of intent was signed with Domtar on May 29, 2009. But by the end of that year, talks had broken off between Domtar and Iogen.
Domtar issued a news release on Dec. 22, stating it would be demolishing the assets at the mill.
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Discussions resumed when Shell took over negotiations on behalf of the ethanol partnership. But it appears the oil company wasn’t any more successful.
“In August, Domtar informed us that the site they had in Prince Albert would no longer be available to us,” said Shell spokesperson Larry Lalonde.
The latest setback will further delay a project that has been a long time in the making. Iogen executives talked about starting construction on the facility as far back as 2000.
Lalonde said the partners are now exploring alternative locations for the project.
Other sites that have been mentioned over the years are Vegreville, Alta., Birch Hills, Sask., and Idaho Falls, Idaho.
“The option we want to deliver on is a project in Canada,” said Lalonde.
Previously considered Canadian locations won’t necessarily have a leg up on other sites. Any site that has enough wheat straw required to feed the plant will be considered.
Iogen had been contracting straw with farmers around the Prince Albert area. Lalonde said the breakdown in talks with Domtar will affect those contracts.
It will also further delay technical design and feasibility work the companies had been conducting.
Lalonde doesn’t expect a final investment decision on the project before 2012. It is taking a back seat to some of Shell’s first generation ethanol projects.
