Cielo prepares to develop 2nd renewable diesel project with purchase of new property
Updated: Sep 9, 2021
Cielo Waste Solutions closed on the acquisition of a 60-acre industrial site in Fort Saskatchewan, about 15 miles from Edmonton, Alberta, Canada, in late August. The company anticipates the location to be home to its second renewable diesel facility, with its first being in Aldersyde, Alberta, roughly 230 miles away. The location is near an area that CEO Don Allan said is called “Refinery Row,” a nickname given to it because of all the blending refineries that Cielo believes will be the primary customers buying its fuel for mandated renewable-blending requirements in Canada.
“We plan on building out the facility to house three of our modular production plants, each with an output capacity of 4,000 liters per hour of waste to fuel,” Raphael Bohlmann, Cielo’s vice president of marketing, told Biobased Diesel Daily.
The production capacity of the proposed facility, once all three process modules are installed, is expected to be 100 million liters (26.4 million gallons) per year. Bohlmann said the facility in Fort Saskatchewan will be capable of producing either on-road renewable diesel or sustainable aviation fuel and marine biofuel, depending on the demand from the blending facilities in the area.
Cielo paid CAD$13 million (USD$10.3 million) for the property and says it is worth nearly CAD$10 million (USD$7.9 million) more than what it paid, plus construction costs considering the land was previously compacted, graveled, fenced and lighted, with a nearly 32,000 square-foot facility built on-site that Cielo plans to use for its proposed operations.
The cost of construction is estimated at CAD$150 million (USD$118.7 million) to complete commissioning of all three production modules on-site, Bohlmann said.
“One of our advantages of being modular is we will begin with one plant and, once operational, immediately begin with the second planned plant, and then the third,” he said. “Basically, it’s CAD$50 million (USD$39.6 million) per plant.”
The proposed facility in Fort Saskatchewan would have an output that is four times greater than its Aldersyde plant. “In this business, there are always [scale-up] issues that come up,” Bohlmann said. “But so far none of them has been insurmountable.”
The company expects the partially developed site to accelerate the build-out of its proposed second production facility, considerably shortening the timeframe to production from 24 months to 18 months.
“We believe this location will quickly advance Cielo’s commercial development in Canada’s largest hydrocarbon industrial park,” Allan said. “We have Canada’s two largest rail companies with their rail yards in direct sight, offtake customers for our waste-to-fuel products, feedstock suppliers and all required subtrades and service vendors in close proximity.”
Cielo financed the purchase through a loan from First Choice Financial and KV Capital.
The company’s general feedstock strategy includes incorporating household, commercial and construction garbage; used tires; railway ties; telephone poles; and various plastics. For Fort Saskatchewan, Bohlmann said Cielo plans on using municipal solid waste and other waste products available in the immediate area.
In addition to the acquisition of the Fort Saskatchewan site, Bohlmann said Cielo has decided to open a new office in downtown Calgary to recruit qualified engineering, legal, marketing, production and fabrication professionals.