Just three days after learning it would receive funding from Ottawa designed to spark ethanol expansion, Husky Energy announced Feb. 16 it would proceed with a 130-million-litre plant at Lloydminster, Sask.
The project received $7.8 million from the $78 million available in the first round of the program. Husky’s Minnedosa, Man., proposal received $6.4 million, but a formal project announcement had not been made as of Feb. 16.
The Lloydminster project is expected to cost $90 million and be operating by the end of 2005. It will be located next to Husky’s heavy oil upgrader.
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Chief executive officer John Lau said the plant will buy 350,000 tonnes of grain each year and produce 134,000 tonnes of dry distillers grain. That would feed 100,000 cows per year, based on a 20 percent ration.
Saskatchewan premier Lorne Calvert said clean livestock feed is an important byproduct of the ethanol plant.
In a post-BSE world, he said, there will be demand for feed that is free of animal byproduct.
The government did not invest in the project, Calvert said. However, it did make some concessions to Husky.
“The 30 percent provision will not apply in the case of Husky,” Calvert said, referring to government legislation that requires fuel distributors to buy that amount of ethanol from plants that annually produce 25 million litres or less.
Brad Hill, president of NorAmera BioEnergy Corp., the other prairie project to receive federal money, said he didn’t expect that concession would hurt NorAmera’s operations.
NorAmera received $3.5 million to help retrofit the former Weyburn distillery to produce 25 million litres each year. That’s twice the size of what the proponents originally planned when they bought the building in 2002.
“This is a huge milestone that we’ve reached,” Hill said.
The federal money means the retrofit will likely be done sooner than expected, Hill said, although the final timelines have yet to be determined.
The Weyburn plant is expected to buy about 67,000 tonnes of wheat each year and produce 23,000 tonnes of high protein distillers grain.
Meanwhile, several other Saskatchewan projects that applied for funding are in limbo.
A group in Shaunavon said it intends to work on other financing plans for a proposed 150 million litre plant there.
But the plant planned for Belle Plaine, Sask., which was announced by the province and Broe Companies of Denver, Colorado, in late 2002, likely won’t proceed.
“It would be difficult for Investment Saskatchewan to continue to promote the Belle Plaine project in light of the Husky announcement,” Calvert told reporters. “The Broe announcement was optimistic. I make no apology for that. What we did not see was BSE on the horizon, the change in international markets.”
The government spent about $700,000 trying to complete the deal. Two other plants were to follow, in Yorkton-Melville and Tisdale.
