Husky Plans Second Large Canadian Ethanol Plant
Date: 10-Jun-05
Country: CANADA
Author: Roberta Rampton
Husky, Canada's fifth-largest oil producer and refiner, is doing the final engineering work to produce 130 million litres (34 million US gallons) of ethanol at a plant in Minnedosa, Manitoba, which now produces only 10 million litres of the fuel additive, Lau said.
"Together with our ethanol plant in Lloydminster (Saskatchewan), Husky will become the largest producer of ethanol in Western Canada," Lau said.
Ethanol, made from grain or other plant sources, reduces greenhouse gas pollutants because the plants absorb carbon dioxide as they grow.
The Canadian government wants 35 percent of gasoline used in the country to contain 10 percent ethanol by 2010 as part of its promise to cut greenhouse gas emissions under the Kyoto Protocol.
The target would require 1.4 billion litres of ethanol per year. Currently, Canada produces about 200 million litres and imports up to 100 million litres, according to industry statistics.
Husky, which is controlled by Hong Kong billionaire Li Ka-shing, is also looking to build a plant at Prince George, British Columbia, Lau told Reuters, with the goal of eventually producing 350 million litres of ethanol.
Lau was in Winnipeg Thursday to announce Husky will spend C$2.625 million ($2.1 million) over five years on research at the University of Manitoba into new types of wheat to be used for ethanol, and more efficient ways of producing the fuel.
Husky is waiting for federal government approvals on a capital grant for its Manitoba project, Lau said.
If the grant is approved this year, Husky could finish the expansion in 2008, he said.
Husky originally planned to expand the plant to 90 million litres, and received a grant of C$6.4 million from the federal government in February 2004 for the project.
But the company decided that a bigger plant would make more sense, Lau said, and put the project and grant on hold.
In 2004, Ottawa gave C$72 million to six new projects that could produce a total of 650 million litres of ethanol, including C$7.8 million for Husky's Lloydminster plant.
Ottawa was set to announce another C$27.5 million in grants this year.
The Manitoba plant will be similar one Husky is building in Lloydminster, which is on schedule to be finished in the first quarter of 2006, Lau said.
The Lloydminster plant is adjacent to Husky's upgrader, which turns heavy oil into light synthetic crude used at refineries in Canada and the United States.
Energy produced by the upgrader can be used by the ethanol plant, Lau said.
He also said that Husky was still deliberating over plans to expand the upgrader, which produces close to 80,000 barrels of oil a day. An expansion could take the plant to 150,000 barrels per day, but the company is looking at its costs, Lau said.
The company has proposed, then shelved, plans to expand the upgrader several times over the past decade because of construction costs and market conditions.
($US1=$1.25 Canadian)
