Captial Expenditures: Big Spending on Dissolving Pulp
February 1, 2012 By Pulp & Paper Canada
One of the largest projects on the books for 2012 is the conversion of Prince Albert Pulp to a dissolving pulp operation. The former Weyerhaeuser mill in Prince Albert, Sask., closed in 2006, and was sold to Paper Excellence Canada Holdings…
One of the largest projects on the books for 2012 is the conversion of Prince Albert Pulp to a dissolving pulp operation. The former Weyerhaeuser mill in Prince Albert, Sask., closed in 2006, and was sold to Paper Excellence Canada Holdings Corporation in the first half of 2011.
Paper Excellence will be investing more than $200 million in the conversion of the mill. One of the first priorities is to get the biomass boiler and power turbine up and running. Prince Albert Pulp has an agreement with Sask Power to provide green energy from the mill’s co-gen plant to the provincial grid. The power produced on-site will also be used to heat the mill during construction.
“We’re working to generate green energy by (some time in) May,” Dale Paterson, general manager of Prince Albert Pulp, told the Prince Albert Herald in January.
“We started in September and we‘re about halfway there now. Five million dollars has been spent on the project (so far) and another $5 million will be spent (in the coming months).
Paterson also noted that the company is aiming to be producing dissolving pulp in the third quarter of 2013.
The pulp mill portion of the facility was built in 1966. At the time it was shut down in 2006 it had an annual capacity of 145,000 t/y of bleached softwood and hardwood kraft pulp.
Another major investment in dissolving pulp could come from Tembec. The company has announced a recovery boiler upgrade and co-gen project, and a possible expansion of its dissolving pulp mill.
Tembec president and CEO James Lopez confirmed in October that the company will proceed with a $190-million boiler replacement at the Temiscaming specialty dissolving pulp mill. The project will substitute a new boiler for the three aging low-pressure boilers currently in use at the site.
In addition to improving productivity and uptime, the upgrade will also permit the facility to sell 30-40 MW of incremental green power to the Quebec provincial electric utility.
Anticipated completion for the co-gen project is Dec. 2013. It will be financed in part by a previously-announced $75-million loan from the Quebec government, at what Lopez says is “substantially better than market cost.” Lopez anticipates a four-year payback for this project.
Lopez also announced last fall a possible 30,000 tonne/yr capacity expansion for the specialty pulp mill. He cautioned investors at a conference in New York that the expansion is not approved yet, “but all the signs are looking very, very positive for the project.”
The $100-million capacity expansion would see the 11 original digesters replaced with 10 new stainless steel vessels. The project is expected to be complete in 2015, and would have a 2.4 year payback.
Overall, $343 million in capital expenditures is earmarked for Tembec’s specialty dissolving pulp business over the next five years. “This is by far the most solid business that we have, with the brightest future and the best, most stable margins,” said Lopez.
The conversion to dissolving pulp undertaken by Fortress Specialty Cellulose Inc. at Thurso, Que., is effectively complete, but construction continues on a co-gen project that is expected to be complete in the third quarter of 2012. The company will receive $9.9 million from PPGTP for the thermal energy project.
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