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Tembec investing in biomethane to dry pulp at Matane mill

Tembec has announced a capital investment totalling $25.7 million for its high-yield pulp mill located in Matane, Quebec. Funding for the biomethane project and a boiler conversion will come mainly from the federal government’s Green…

Tembec has announced a capital investment totalling $25.7 million for its high-yield pulp mill located in Matane, Quebec. Funding for the biomethane project and a boiler conversion will come mainly from the federal government’s Green Transformation Program ($18.9 million) and the Province of Quebec through the Agence de l’efficacité énergétique’s Heavy Oil Consumption Reduction Program ($6.3 million).

“This investment will result in a significant reduction in costs for Matane and will allow the mill to be competitive in global markets for years to come,” said Yvon Pelletier, executive vice-president and president, Specialty Cellulose and Chemical Group. “The environmental benefits will also provide an appealing attribute in the marketplace.”

The project has two main components. The first is a new anaerobic treatment facility. Estimated to cost $23.9 million, this system treats effluent and collects the methane gas produced in the treatment process, allowing it to be used as a bio-fuel for drying the pulp produced at the site.  With an estimated cost of $1.8 million, the second component involves the installation of an electric boiler that will replace the current heavy oil fuelled boiler.

The combined effect of the two components will result in the elimination of all heavy oils and the vast majority of the light oils currently used as a fuel source for the generation of the mill’s various process steam and drying requirements. They will also result in a significant improvement in the mill’s cost structure, with EBITDA projected to increase by $6 million on an annual basis, beginning when the project is completed in mid-2012.

“The investments announced today will improve the position of the Matane mill in environmental, energy and economic terms. This initiative is consistent with the company’s stated objectives of investing in its core businesses, pursuing opportunities related to green energy projects, and moving all of its facilities into the first or second quartile of their respective cost curves,” said James Lopez, president and CEO of Tembec. 

Tembec is a large, diversified and integrated forest products company with operations in Canada and France.