Coastal Paper...Agreement to Supplement..Gas With Renewable Energy...(MS)

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Coastal Paper Signs Agreement to Supplement Natural Gas With Renewable Energy at Facility in Wiggins, MS

http://biz.yahoo.com/prnews/060927/dcw013.html?.v=68

WIGGINS, Miss., Sept. 27 /PRNewswire/ -- Coastal Paper Company, a wholly owned subsidiary of Cellu Tissue Holdings, Inc., announced today it has signed a 15-year energy supply agreement with Intrinergy, a leading company for renewable energy for industrial customers, to obtain steam and part of its electricity for its facility in Wiggins, Stone County, MS.

Under the agreement, Intrinergy will provide the facility with up to 50,000 pounds of steam per hour by supplying synthesis gas to displace the use of natural gas in major portions of Coastal Paper's manufacturing processes. Intrinergy will also supply up to one megawatt of base load electricity to the facility.

"At a time of volatile natural gas prices, this agreement will ensure our access to a predictable supply and price for steam to keep our products competitive. For example, the price of natural gas on the futures market surged by 14 percent in just one day last July as a result of the nationwide heat wave and uncertainties in energy supplies. By displacing natural gas with renewable synthesis gas generated onsite by our energy partner, Intrinergy, we will maximize our competitiveness by securing our energy supply at a predictable price," said Russ Taylor, chief executive officer of Cellu Tissue.

The agreement provides that Intrinergy will build, own and operate an approximately $10.5 million state-of-the-art gasification unit at the Coastal Paper facility to convert biomass like wood and other agricultural materials into steam and electrical power.

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