Burnaby-based Lignol Energy Corp. (TSX-V:LEC) is looking to a Golden State-based ethanol producer to help cut its costs and utilize its proprietary technology.
Lignol announced a memorandum of understanding this morning looking at the possibility of combining its biorefineries with ethanol plants owned by Pacific Ethanol Inc. (NASDAQ:PEIX).
Lignol is focused on a proprietary technology that converts wood waste to ethanol.
The company has faced cost hurdles as low oil prices during the downturn challenged the economic viability of the ethanol market. It now wants to deploy its technology in Pacific’s plants to cut its capital costs and help Pacific produce more ethanol.
California-based Pacific has five ethanol plants in the Western U.S. that have a combined production capacity of nearly 250 million gallons per year.
Two of the plants are in California and Lignol sees them as ideal locations for its biorefineries because of the state’s access to wood biomass and its desire to reduce the carbon footprint of ethanol produced and sold there.
Lignol president and CEO Ross MacLachlan said: “Working with Pacific Ethanol on the West Coast is a natural fit for Lignol … Pacific Ethanol’s assets are first class, and each of their locations appears to offer tremendous synergies for our technology.”
Lignol’s share price range during the past week: unchanged $0.16; 52-week high: $0.27; 52-week low: $0.12.