25 July 2006 -- Tolko Industries Ltd. and Nexterra Energy Corp. announced today they have successfully completed their new gasification project at Tolko's Heffley Creek plywood mill near Kamloops, British Columbia, Canada. The new "syngas" plant converts wood residue into low-cost, clean, thermal energy, replacing high-cost natural gas and moving this mill closer to energy self-sufficiency. Tolko said the system will not only save the mill more than $1.5 million in annual fuel costs, but will also improve local air quality and reduce Tolko's greenhouse gas emissions by 12,000 tonnes per year.

"This project underscores Tolko's commitment to investing in technologies that make our mills more energy self-sufficient, and improves our environmental and bottom-line performance," said Jim Baskerville, Tolko's Regional Manager, Veneer and Plywood. "We are very pleased with the Nexterra gasifier system. It is user friendly, simple to operate, and we are working with Nexterra to identify opportunities where we can apply the technology at other Tolko mills."

"This project is a great example of the innovative use of biomass for energy production—a concept we are addressing in the development of a new bioenergy strategy," said Richard Neufeld, BC Minister of Energy, Mines and Petroleum Resources. "In the future, bioenergy will help meet our electricity needs, help create jobs and develop economic opportunities, while also helping to protect our health and environment."

"This is tremendous news for the forest industry," said Jim Dangerfield,
Vice-President, Western Region, for Forintek, Canada's Wood Products Research
Institute. "Despite progress toward energy self-sufficiency, the industry still consumes billions of dollars of fossil fuel. Switching from natural gas to syngas using Nexterra's gasification technology has the potential for widespread application in the forest industry to reduce reliance on fossil fuels, cut costs and improve competitiveness."