March 24, 2006

Major Canadian wheat buyer to increase ethanol capacity

Husky Energy Inc, a Canadian-based company, is building an ethanol plant in Lloydminster, Saskatchewan to be completed this year that would add 130 million litres a year to its production capacity.

The company, with upgrades to another plant in Manitoba to be completed next year, will become the largest feed wheat consumer in Western Canada once the two plants are in operation. 

The two plants will require a total of 700,000 tonnes of feed wheat a year, utilizing the abundant wheat supplies that have been accumulating in the region, said Dennis Floate, senior communications advisor with Husky Energy. While Husky intends to source most of its wheat from local producers, he said the company would look for other sources if necessary.

The company's existing plant uses 27,000 tonnes of wheat a year to produce 10 million litres of ethanol. Both plants will each have the capacity to produce 130 million litres of ethanol a year when construction is complete.

In Lloydminster, the company started contracting with grain buyers in late 2005, and is still working with them, said Floate, adding that the wheat will be acquired through a combination of contracts and buying on the market.

Floate noted that provincial mandates for renewable fuels in Manitoba and Saskatchewan would provide a set demand for ethanol.