A proposed $4 billion plant at Belle Plaine, Sask., that would use a petroleum byproduct to produce electricity and products for the fertilizer industry has received funding for design work.
The Saskatchewan government and TransCanada Corp., which would own and operate the plant, announced last week each would spend up to $26 million on engineering and design costs for what is being called a polygeneration plant.
The facility would use petroleum coke to produce hydrogen, nitrogen, steam, carbon dioxide and 300 megawatts of electricity. The products could also be used in enhanced oil recovery.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
In the announcement, which came days before a Saskatchewan election was called, the government and TransCanada committed to spending $6 million on the initial design, which is expected to be complete in mid-2008. If the project is deemed economically viable, further engineering work will be done and more money required.
TransCanada would repay the government if the project proceeds.
Nearby established industrial companies would use the output of the plant for their own production.
Rob Plosz, general manager of the Mosaic solution potash mine in Belle Plaine, said the mine would use the steam to run its processors. He said the attraction is a stable, long-term energy supply.
“We currently burn natural gas,” he said. “Right now we’re subject to that volatility.”
Mosaic also owns half of Saskferco, across the road from the mine. Plosz said the fertilizer plant would be able to use steam, nitrogen, carbon dioxide and hydrogen.
TransCanada vice-president Brad Thomson said the project would represent $4 billion of investment by the time it’s complete.
Design costs of about $50 million are standard for this type of technically advanced project, he added.
“The government and TransCanada will work together and we’ll have a number of checkpoints along the way on this spending to ensure that whatever we do is done in a very prudent and accountable and transparent manner.”
He said the government should be involved in a project like this because it includes the development of new environmental regulations to achieve emission standards that haven’t been achieved in the past.
Five years ago, the province announced with much fanfare that it would partner with an American company to build an ethanol plant at Belle Plaine. The plant was never built.
Environment minister John Nilson said this project is different because TransCanada has already been working on it and spending money.
“This one came to this stage where they needed some assistance to move to the next level and the timing was now, so we’re going to do it,” he said.
The money will come from the Green Future Fund, which was established recently with money from the sale of the government’s share of the NewGrade heavy oil upgrader in Regina to Federated Co-operatives Ltd.
Nilson said Saskatchewan recognizes that power generation has to be “greener” over the next 30 years and polygeneration is one way to do that.
Thomson said the election campaign and result would have no bearing on TransCanada’s commitment to the plant.
“We’ve worked on it for two years,” he said.
“We believe it is a great project for Saskatchewan and we will see it through to the end.”
If the plant goes ahead as planned, construction could start in 2008 with completion scheduled for 2013.
TransCanada is perhaps best known as a pipeline company but is a growing independent power producer with interests in Canada and the United States.
