Lignol Energy Corporation (LEC.V) today announced that it is suspending joint venture plans with Suncor Energy Inc. (SU.TO).
In a release, the company said it was not "prudent" to enter into joint development of a cellulosic ethanol commercial demonstration plant in Grand Junction, Colorado "given the instability of energy prices, the uncertainty in the capital markets and the general market malaise."
Lignol has worked closely with Suncor for the past three years, and announced on October 23, 2008 an agreement to negotiate entering into a joint venture, which would have included the construction of a proposed $80 million cellulosic ethanol plant in Grand Junction, Colorado. The plant in Colorado was previously announced in 2008 in connection with a grant of $30 million from the U.S. Department of Energy (DOE). Current economic conditions have led the parties to halt this process and end negotiations.
"Suncor will continue to monitor the progress of Lignol’s technology and while it is disappointing for Lignol to be suspending the Grand Junction project, this is a practical decision based on the current realities that many companies are facing today. We are fortunate that this decision was reached at an early stage in the development of the project and as such Lignol and Suncor have not incurred significant costs," said Ross MacLachlan, President and CEO of Lignol. "We are currently exploring various alternatives for the US$30 million grant from the DOE including the re-examination of project time-lines, site locations and the participation of other industrial partners. We will report on the outcomes of these discussions as they unfold."
Lignol is a Canadian company undertaking the development of biorefining technologies for the production of fuel-grade ethanol and other biochemical co-products from non-food cellulosic biomass feedstocks. Lignol’s modified solvent-based pre-treatment technology facilitates the conversion of cellulose to ethanol and the production of biochemical co-products.
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