Tembec has confirmed a $190-million capital investment to upgrade its specialty cellulose manufacturing facility at Temiscaming, Que. This investment will increase annual production of green electricity by up to 40 megawatts, reduce sulfur dioxide emissions by 70%, increase Temiscaming's annual production capacity of specialty cellulose by 5,000 tonnes, and make Temiscaming one of the world's lowest-cost specialty cellulose manufacturing facilities.
Pöyry's Energy business group has been awarded the detail engineering and procurement assistance support contract for the project.
This project is the first phase of a two-phase investment plan for the facility. It will involve the replacement of three old boilers with a new high-pressure boiler designed to burn waste sulfite liquor, a co-product of the specialty cellulose manufacturing process, producing green steam for use at the facility. The project also calls for the installation of a new electricity turbine that will be driven by this steam. The turbine will increase the Temiscaming facility's green electricity production capacity from its current 10 megawatts to, eventually, 60 megawatts. The boiler is scheduled to start up in December 2013, followed by the turbine, in May 2014.
Hydro-Québec will offtake the additional green electricity produced by this turbine under a 25-year contract at $106 MW/hour, indexed with CPI, which will strengthen and stabilize Tembec's revenues through the economic cycle.
Pöyry's assignment, valued at $7.2 million, includes project management and detail engineering design for all disciplines. The project will be executed by Pöyry's office in Montreal.
Once the new equipment is in operation, Tembec expects a four-year return on investment, through new revenues from green electricity, the additional production of 5,000 metric tonnes of specialty cellulose and lower costs.
The new boiler, turbine and emission control equipment will be sized to accommodate Phase 2 of the project, a follow-on investment of $120 million which is currently projected for 2014- 2015. Phase 2 would increase Temiscaming's annual specialty cellulose production capacity by 30,000 metric tonnes, boost green electricity generation by 10 megawatts to attain full turbine capacity, and further reduce operating costs.
Tembec is the world's second leading producer of specialty cellulose.