Katahdin mill plans going well Restart date could be in 2010, officials say

MILLINOCKET – Brookfield Asset Management’s $1.5 million winterization effort and its assessment of the Katahdin Avenue paper mill’s capacity for a biomass boiler are going well, but company officials said Tuesday they don’t know whether the mill will reopen next year or in 2010.

Engineering analysis begun last month shows that the mill’s No. 4 boiler, which helps make steam crucial to papermaking, is suitable for conversion from oil to biomass fuel, said Daniel Whyte, a vice president at Brookfield Renewable Power, a Brookfield Asset subsidiary.

The Katahdin region, which connects to one of the largest contiguous forests in North America, has sufficient biomass and biomass providers to fuel the mill. Transmission capacities for shipping excess electricity from the proposed 20-megawatt boiler onto the New England grid also check out, he said.

“So far, in the work we have done, we have not found any showstoppers,” Whyte said after he and other Brookfield representatives met with the Town Council on Tuesday. The executive session ran 11/2 hours.

“They are making really good progress,” Town Manager Eugene Conlogue said. “They continue to be on track with meeting us and keeping us abreast of developments and I feel even more optimistic about the future of the mill than I did in October.”

Brookfield briefed town officials on Oct. 9 that it was hiring Cianbro Inc. and Babcock & Wilcox Inc. to assess the mill’s biomass adaptability.

Brookfield hopes to wean its Katahdin Paper Co. LLC mill from its profit-killing addiction to oil, of which it burned about 400,000 barrels in 2007, and reopen it as a top-tier papermaker.

Brookfield shut the mill on Sept. 2, beginning a layoff process that had slightly more than 100 of the mill’s 208 workers pink-slipped as of last week. Many town workers are bumping less-experienced workers at the company’s East Millinocket mill, which with the town mill makes Katahdin Paper the region’s largest employer.

Supplying the 385,000 green tons of biomass to run the mill – the equivalent of about 400,000 cords of wood – likely would employ many woodsmen and truckers, company officials have said.

The company will spend about $310,000 winterizing the mill, $300,000 heating it over the winter and $336,000 for a heating unit inside the mill, Whyte has said.

Several issues remain, Whyte said. Brookfield has yet to find a partner to operate the biomass facility, the assessment won’t be finished until February, and permitting would take 60 to 90 days.

The biomass installation could start during the permitting process, however. That installation likely would take about 10 months, Whyte said.

Whyte said that with the national economy facing recession, no one knows how long it will take to find a partner. Conlogue expressed hope that Brookfield could work with the partners that it had been working with through last summer.

The partners fell out of the project over the assessment costs that Brookfield is now paying.

“Once they finish the appraisal and come up with a conversion cost, finding an investor should happen pretty quickly,” Conlogue said. “If they already have someone interested and they are paying for the engineering work, that makes finding an investor so much easier.”

Town Councilor Scott Gonya said he would be shelving his idea to use eminent domain to seize Brookfield’s power-generation facilities on the mill’s campus, at least until Brookfield’s mill rejuvenation plans run their course.

He also expressed hope that the mill could reopen in spring 2009, when rising temperatures cut into steam production costs or if oil costs, which have been plummeting rapidly since September, continue to decline.

“They seem to be sincerely concerned about the people here,” said Gonya, who has been a harsh critic of Brookfield Asset, though not of Katahdin Paper Co. LLC and its mill managers, Fraser Papers, for its abrupt handling of the mill closure.

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