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April 2007

Vol. 12, No. 16 Week of April 22, 2007

U.S. partners to build Canadian biofuels refinery

Gary Park

For Petroleum News

Touted as the largest biofuels refinery of its type in North America, a new plant backed by a U.S. partnership is scheduled to start commercial operations by fall 2008.

The facility will be built south of Red Deer in central Alberta and provide 90 full-time jobs when completed.

It is designed to produce 100 million gallons each (a total of 1.12 billion liters per year) of ethanol, biodiesel and crushed canola — a total output that exceeds the combined volumes from all biofuels refineries either operating or under construction across Canada.

The partners are New York-based private equity firms, Riverstone Holdings and The Carlyle Group, and Florida-based Dominion Energy Services.

Carlyle/Riverstone Global Energy and Power Funds has $8.1 billion under combined management.

On its own, Carlyle has $56 billion under management, investing in buyouts, venture and growth capital, real estate and leveraged finance in North America, Europe and Asia.

Riverstone has committed $5.5 billion to 36 investments in buyouts and growth capital investments in midstream, upstream, power, oilfield service and renewable sectors of the energy industry.

Dominion develops renewable fuel facilities in the U.S. and Canada. Its principals played a key role in the deregulation of Canada’s natural gas sector in the 1980s.

Dominion, through Toronto-based Blackstone Energy Services is also retrofitting a cornstarch plant in Ontario into an ethanol producing facility.

Dominion President Curtis Chandler said April 17 the Alberta government took a proactive role in supporting the venture, including a production credit of 14 cents per liter, using a C$239 million fund set up to support biofuels projects.

In addition, the Canadian government has earmarked C$2 billion to support ethanol and biodiesel projects and technology.

The Red Deer site was chosen because of its access to major rail systems and its proximity to feedstock.

Other projects in the works for Alberta include a C$275 million biofuels complex east of Calgary by CR Fuels, Canadian Bioenergy’s 114 million liter biodiesel refinery in the Edmonton area, which is due for completion in 2008 and Biostreet Canada’s plans for a 175 million liter facility in central Alberta.






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