The cancellation of a $4 billion methanol gas plant in the County of Grande Prairie may not be the end of it.

Mark Tonner, Nauticol Energy Ltd. chief executive offer (CEO), called it “unfortunate” the company’s plant will not be moving forward but said he is still leading a series of energy service companies with “significant operations in the area.”

Tonner said it’s possible a scaled-down net-zero methanol plant could proceed on the proposed site south of the city but Nauticol, in its current state, would no longer be involved. 

More information on the smaller project would “be made available if and when it’s appropriate,” Tonner said.

For now, he said he is actively hiring and investing in local companies.

“I plan to spend the next several years helping to grow the Grande Prairie economy; it’s just not going to be on the scale that we set out to do on (the $4) billion project,” he told Town & Country News. 

The province priced the proposed net-zero methanol gas plant at $4 billion and said the project would create upwards of 5,000 construction jobs and 1,260 direct and indirect jobs in the region.

The recent announcement came as a disappointment to County of Grande Prairie Reeve Bob Marshall.

“That (methanol plant) would have meant a huge economic boom to not only the county but the region as a whole,” said Marshall. 

Tonner still believes Grande Prairie is the right spot for a net-zero methanol plant. 

“There’s some other commodities that are more challenging to move out of the Grande Prairie region, but methanol works, we think it works, and all the fundamentals work.”

He said the cancellation of the plant was caused by multiple factors, including the pandemic, and a change of “risk appetite” that made it challenging to ensure guaranteed commitments from financiers.

The County of Grande Prairie owns the land where the site of the original plant was proposed, about 10 kilometres south of the city.

Nauticol currently holds first right of refusal, so if another company were to look to purchase the land, Nauticol would still have the opportunity to buy the land first, explained Marshall.

Still, the reeve believes the site could be used for other industrial needs.

Zoning on the proposed site is under the county’s rural industrial direct control, allowing for many different industrial applications, said Marshall.

He said electricity production, industrial manufacturing, a rail yard, or even possibly a biomass plant are options that could fit in the space.

“We know that there’s potential there,” said Marshall, noting that county economic development will also be looking into options.

The county purchased the land from the province, which cost “significant dollars,” said Marshall. 

Tonner noted lots of expertise is needed in executing a project of the magnitude of the original proposal; even the scaled-down version may see the assistance of former members of Nauticol. 

“We pulled some very capable people together to do a very ambitious project.” 
Tonner says over the last four years, Nauticol invested $35 million in development of the net-zero methanol plant.

“We really left no stone unturned, and this included many discussions with senior people from the provincial and federal governments, a large number of institutional capital providers (but) ultimately, the pieces that needed to come together didn’t happen.” 

The proposed facility was expected to produce 3.4 million tonnes of net-zero blue methanol annually from natural gas for export.

Demand for blue methanol in the marine industry to reduce maritime emissions is growing. In 2021, Nauticol announced a joint venture with Fortrec, which operates a large marine fueling depot in Singapore.

A scaled-down version of the plant locally would focus more on domestic supply, said Tonner.

“The belief was and still is that the Alberta economy needs to convert our raw materials into value-added products, particularly in the energy sector,” he said.

All of Nauticol staff were laid off in late October and all operations ceased, said Tonner. “Effectively, all development activity and commercial capacity have been suspended.”

“I’m focusing my energy now on entities that have existing assets and operations, existing cash flows, and pulling those pieces together,” said Tonner.

The Nauticol plant was first announced in 2018, and was to be located near the International Paper Canada pulp mill south of Grande Prairie. 

In 2018, the proposed facility was expected to cost $2 billion, with costs continually rising over the years as the project was expanded. 

By Jesse Boily, Local Journalism Initiative Reporter

Original Published on Feb 23, 2023

This item reprinted with permission from   Town & Country News   Beaverlodge, Alberta

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