CORE BioFuel Inc. not ruling out a Burns Lake plant

CORE Biofuel Inc. said the company is not ruling out locating a green gasoline plant in the Burns Lake area.

Doug Sheppard, CORE Biofuel Inc. vice president of investor relations said to Lakes District News last week that the company is not ruling out locating a green gasoline plant in the Burns Lake area.

Shepherd said that while the company is also looking towards Houston as a potential location for a plant, no agreements have been made and the company is now willing to take another look at Burns Lake.

CORE BioFuel Inc. is currently commercializing its patent pending green gasoline process. The gasoline will be a 94 octane, clean burning alternative to conventional gasoline from petroleum sources. A plant would not only produce gasoline from unwanted wood waste but its by products will consist of water, electricity to run its own operation and carbon dioxide suitable for commercial use.

During 2009, the company first proposed to locate a plant on a property at Decker Lake, however they hit a snag with BC Hydro when they discovered the electrical line capacity of local substations would not support the load they needed to operate the plant.

“Power was the reason why we couldn’t locate the plant in Burns Lake, however we have recently been contacted by BC Hydro and were told that power supply is no longer an issue,” said Doug Sheppard, vice president of corporate development at CORE BioFuel Inc.

However George Stanko, Core BioFuel Inc. president said that there may need to be some upgrades to the Burns Lake substation, if the company is to locate their plant in Burns Lake.

“The initial response from BC Hydro was that power was no longer an issue. After a closer look Sachie Morii (from BC Hydro) indicated that they may have to boost the voltage at the Burns Lake substation to support the load addition, which is not a long lead time issue, but there would be a cost associated with that process. A study will be required to determine the exact requirements.”

Stanko said he has spoken with the economic response task force working Burns Lake and is being lead by forest industry veteran Bob Clark, about CORE BioFuel Inc.’s potential interest in locating a plant in Burns Lake. “We will work with the task force and the various groups to determine if the climate is now right to encourage CORE BioFuel Inc. to refocus on Burns Lake. Burns Lake was the first community that we evaluated and gave us a very warm welcome. We would be very pleased to contribute to the local economy in Burns Lake, especially after the recent tragic events [at Babine Forest Products].”

Bob Gammer, BC Hydro’s manager of community relations confirmed that the power supply in the Burns Lake area has not increased over the last couple of years and he said it is not likely to increase until 2022.

“Currently there is no plan for a substation upgrade at Burns Lake. The 2011 load forecast shows Burns Lake substation load is under its firm capacity until 2022. Therefore, no increase in substation capacity is planned at this time. However, should the forecast change due to a new customer, appropriate action would be taken to ensure adequate capacity is available, including a necessary substation upgrade.”

With regard to increased local capacity due to the loss of Babine Forest Products, Gammer said, “BC Hydro has not received any indication from Babine Forest Products that it is not going to rebuild the sawmill. BC Hydro will honour the electric service agreement and ensure that a similar quantity of power is available upon the reconstruction of the sawmill.”

He went on to say that should the sawmill take significant amount of time to rebuild, and in the meantime not require as much power, BC Hydro is willing to work with all stakeholders to make that power available to other customers.

“In discussion with Babine Forest Products, BC Hydro will get a definitive indication of the sawmill’s power requirement before that power is allocated to any potential future customers,” Gammer said.

“BC Hydro does not want any new customer to use the circuit and distribution infrastructure that is currently used by Babine Forest Products, if the mill is to be rebuilt.”

While Sheppard said finding a location for a future plant is important, he said that CORE BioFuel Inc.’s first priority is capital investments. The company recently announced that it has signed an exclusive agreement with Osprey Capital Partners Inc., based in Toronto.

Osprey Capital will secure equity investment capital to fund the completion of construction engineering for CORE’s first wood-to-Green Gasoline plant to possibly be constructed in Burns Lake or Houston.

The contract will allow CORE BioFuel Inc. to secure project debt financing and performance guarantees through AON Reed Stenhouse, one of the largest insurance brokers in the world.

Osprey’s work will be spearheaded by Alan Crossley, who has over 25 years of experience in the industry.

Stanko said, “We are excited about signing this agreement with Osprey Capital. “

“This positions us to take a giant step forward and become the global leader in advanced cellulosic biofuels production,” he said.

 

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