Iogen signs LOI for proposed cellulosic ethanol plant at former pulp mill

By Hope Deutscher | June 03, 2009
Report posted June 4, 2009, at 2:23 p.m. CST

The government of Saskatchewan has signed a letter of intent with Iogen Corp., an Ottawa enzyme manufacturer and cellulosic ethanol producer, and Domtar Corp., which owns the Prince Albert Pulp Mill, to develop a first-of-its kind cellulosic ethanol plant and bioenergy facility at the mill.

The Prince Albert Pulp Mill and associated facilities have not operated since April 2006.

Under the agreement, Iogen Energy will advance business plans for a facility that would convert cereal straw to cellulosic ethanol. According to a government press release, if the final investment decision is positive, the multi-million dollar project, in partnership with Royal Dutch Shell, would also include a power plant producing green electricity from forest and ethanol plant residues.

According to Iogen's Web site, the company is in the process of conducting feasibility studies and assessing environmental information for the proposed cellulosic ethanol facility in the Prince Albert Region of central Saskatchewan. Iogen will hold several Community Information Sessions from June 15-17.

"The signing of this agreement is an essential next step for our project in Saskatchewan," said Pat Foody, Iogen chief operating officer. "It allows us to proceed with the development and assessment work that will provide the needed input into the eventual decision whether to proceed."

Following design and detailed feasibility work, Iogen and Shell plan to make a final investment decision on the project. If the project proceeds, the company would purchase mill assets from Domtar that are required for the new facility. The government would then assume ownership for the remaining mill property and be responsible for existing environmental obligations associated with the decommissioning of the pulp mill site. In exchange, Domtar would pay an environmental settlement fee to the province to compensate for its share of environmental site obligations.

Saskatchewan Energy and Resources Minister Bill Boyd made the LOI announcement on June 1. "Redevelopment of this mill site has been a priority for us, for our forest industry and for the people of the area," Boyd said. "A project like this is not only a potential win-win for our forest industry and area farmers, but it also showcases new technology and new approaches by a leading Canadian energy company."

For more than a year Iogen has proposed it would build a commercial-scale facility in Saskatchewan. It currently operates a demonstration-scale plant at its Ottawa facility and has applied for funding from the federal government's NextGen Biofuels Fund for a commercial-scale facility.

The LOI proposes that Iogen work with provincial officials in arranging to work with local forestry firms "wishing to invest in power generation as a means of disposing of their residuals," by allowing them to use whatever spare boiler capacity Iogen would have at the site.

"Domtar will continue to work co-operatively with the Government of Saskatchewan and Iogen/Shell to bring this project to fruition," said Patrick Loulou, Domtar senior vice-president of corporate development.

If the project goes ahead, the government would also commit to purchase green power produced from the plant and provide new growth tax incentives related to technology commercialization and transportation.

To read more about Iogen and its enzyme and cellulosic ethanol production, read "Cellulosic Ethanol: Ready, Set, Go."

Iogen Community Information Sessions:
June 15, 2009 - Prince Albert
5-9 p.m., Prince Albert Exhibition Center, East/West Room

June 16, 2009 - Birch Hills
5-9 p.m., Civic Center

June 17, 2009 - Melfort
5-9 p.m., Travelodge, Gala Room