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Northern Pulp to Save $16 million/year

Abercrombie Point, Nova Scotia, Canada 08 April 2013 -- Three capital projects in the works for Northern Pulp Nova Scotia are expected to save the NBSK mill about $16 million per year. The projects include the conversion of two boilers and a lime kiln to burn natural gas, and the construction of an on-site chipping facility.

The Nova Scotia government announced in early April more than $20 million in loans to the pulp mill, to help fund these projects. In addition, the provincial government is contributing $2.5 million to assist Heritage Gas to extend its pipeline to Pictou County, N.S., where Northern Pulp is located.

“Today's announcement helps Northern Pulp deliver on our goal to build a clean, modern and competitive forest company,” said Don Breen, acting general manager, Northern Pulp. “We live in Pictou County near the mill with our families and friends, and are fully committed to doing a better job of reducing air emissions and improving environmental and operational performance to help us export value-added Nova Scotia forest products to the world."
The pulp mill’s commitment to be the first, anchor customer for the natural gas service was crucial to Heritage Gas’ $15.3-million project. The province will lend Northern Pulp $3.6 million and provide a capital equipment incentive of $900,000 to help it convert equipment to natural gas.

In addition, the province is providing $5.2 million, combined with $5 million from the company, to build an on-site chipping facility, the Chronicle Herald reported on April 5.

“This will allow us to reduce waste significantly by using a lot more of the trees,” Don Breen, general manager, told the Chronicle Herald. The chips will be used to make kraft pulp.

According to the newspaper, the chipping facility will create 20 full-time permanent positions and Breen estimates it will save the company $8 million annually. The conversion to natural gas is expected to save the mill $8 million annually in energy costs, Breen said.

The Chronicle Herald also reported that the province is loaning the company $12 million to install equipment that is projected to remove 80% of the particulate matter in the mill’s air emissions. A portion of the loan, $2.5 million, is forgivable, provided certain employment targets are met.

Breen told the Chronicle Herald the equipment upgrades will help the mill to be more competitive. “We sell all of our product and we are competitive now, before the additions. What’s fighting against us is the high Canadian dollar and that the pulp price is depressed. However, with the $16 million in savings from these projects, we will be much more competitive.”

The first phase of the pipeline project, to begin this spring, is to build a steel pipeline to Northern Pulp, on Abercrombie Point. That is expected to be finished by Dec. 1, with an extension to the nearby towns of New Glasgow and Stellarton planned for 2014.


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