Enerkem advances methanol-ethanol strategy with offtake agreement

By Kris Bevill | September 15, 2011

Montreal-based biofuel and chemical technology developer Enerkem Inc. announced it has signed an offtake agreement Methanex Corp. for methanol that will be produced at Enerkem’s 36 MMly (10 MMgy) facility in Edmonton, Alberta. The facility is currently under construction and is expected to begin producing methanol from municipal solid waste (MSW) in the second half of 2012.

“The access to Methanex Corporation’s worldwide distribution network, coupled with our ability to produce methanol from non-recyclable waste represents a timely opportunity for Enerkem in the development of its commercial activities,” Enerkem President and CEO Vincent Chornet said in a statement. “Our proprietary technology platform allows for the production of renewable fuels and chemicals, including methanol, which we can sell as an end-product or convert into cellulosic ethanol.”

Marie-Hélène Labrie, vice president of government affairs and communications at Enerkem, said the company’s plan to install an ethanol production island at the facility is proceeding as planned and will come online after methanol production begins, although she declined to offer an estimated start-date for ethanol production. “This offtake with Methanex for our first full-scale commercial plant allows us to take advantage of our intermediate product and start generating some revenues from it while we finalize the construction of the ethanol island,” she said.

Enerkem’s subsidiary, Enerkem Alberta Biofuels LP, began constructing the Edmonton facility in August 2010. The Alberta government and the City of Edmonton supplied $23 million in funding for the $80 million project, which was initially expected to become operational this year. The City of Edmonton has also signed a 25-year agreement to supply 100,000 metric tons of non-recyclable MSW annually to the facility.

Enerkem’s proprietary thermochemical technology converts waste materials to syngas first, then methanol, ethanol and other chemical intermediates. Methanol is reportedly easier to produce, so is a logical first step in commercial-scale cellulosic ethanol production. Another company, Range Fuels Inc., also produced methanol on its way toward large-scale cellulosic ethanol production, but wasn’t able to achieve its goal and shut down the facility before producing ethanol. Labrie said Enerkem’s technology ensures that unfortunate outcome will not occur in Edmonton. “Our technology platform has always been based on the production of methanol as a chemical building-block from which we produce ethanol through well-established catalysts, as opposed to others who have tried to develop new catalysts to produce ethanol directly from syngas and ended up with mixed products they had not expected,” she said, adding that Enerkem’s technology has been tested and validated for more than 10 years at its 1.3 MMgy demonstration-scale facility in Quebec.

Enerkem is also developing a 10 MMgy MSW-to-ethanol facility in northeast Mississippi near Pontotoc. The U.S. DOE awarded a $50 million grant for the facility’s construction and operation in 2009 and earlier this year the USDA offered the project a conditional commitment for an $80 million loan guarantee. The company stated previously that it expects that plant to become operational in 2013.