Regina-based Canadian Green Fuels has announced plans to spend $50 million to build and upgrade facilities to produce 240 million litres a year of biofuel from oilseeds.
The project would proceed at two locations and potentially earn gross revenue of $300 million annually.
Construction could begin within the next two months, said CGF chief development officer Troy Metz. Production would begin by summer 2009.
The company has an option on land in McLean, about 40 kilometres east of Regina along the Trans-Canada Highway, where it intends to build a new 200 million litre plant. It also plans to expand its existing plant in Regina to 40 million litres.
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“We’re planning an initial public offering, most likely on the Toronto Stock Exchange venture market,” said CEO Mike Shenher. “But we haven’t finalized those details yet.”
A prospectus should be available by the end of this month.
He said the company decided to raise money on the stock exchange because of the interest in environmentally friendly fuels.
CGF manufactures biodiesel, additives, lubricants and fuel conditioners from oilseeds. Although it uses mainly offgrade canola, it can and has crushed flax, camelina, hemp and soybeans.
Metz said the expansion and construction would require 460,000 tonnes of oilseeds or about 1,200 tonnes per day. The company doesn’t anticipate a supply problem because of its ability to crush a variety of oilseeds and because it doesn’t compete in the food grade market.
Shenher also said the Canadian Canola Council is predicting a 65 percent increase in production by 2015.
The company will likely contract oilseeds but hasn’t finalized the formula yet, he said, noting it’s difficult to contract offgrade crops.
There is no government money involved in the plan. Shenher, who has run for the governing Saskatchewan Party, said he considers business plans that required government money to be “some sort of social welfare plan.”
However, he said the company would take advantage of incentives such as the Saskbio program that offers repayable loans for construction of renewable fuel facilities.
CGF sells its fuel products on store shelves.
“We’ve been competing on price because our operation here is very efficient,” Shenher said.
He said engines that use biodiesel blends of up to 20 percent will see reduced maintenance and enhanced performance. The products are also safe, he added.
“If you spill it, it’s more biodegradable than sugar. It’s less toxic than table salt.”
The company sells its byproducts to animal and pet food suppliers and nearby feedlots.
CGF now employs nine full-time workers. That will increase by 55 or 60 once the new plant opens.
In the future, the company could take its technology on the road. Metz said the “cookie cutter” continuous flow production system could be set up on a flat-deck trailer or rail car and taken anywhere.
He describes it as an above ground oil well.
“We are in fact bringing to the province a new type of oil patch. It’s renewable. It is green. It has long term potential.”
The energy balance for biodiesel is about 3.5 to one; that is, 3.5 units are produced for every unit of energy put in, he said.
