Terra Grain Fuels and Federated Co-operatives Ltd. are pleased to announce that they have reached a mutual agreement in which FCL will acquire TGF's 150 MMly (39.63 MMgy) ethanol plant near Belle Plaine, Saskatchewan.

This move positions local co-ops across Western Canada to be able to continue to provide transportation fuels to their members to meet existing renewable fuels standards and to prepare for the incoming national Clean Fuel Standard.

"As an active contributor to Western Canada's energy sector, we understand that we have a role to play in reducing greenhouse gas emissions and finding ways to lower the carbon intensity of the fuel we manufacture and distribute," said Cal Fichter, FCL vice president of energy. "This purchase not only prepares us to meet the incoming national Clean Fuel Standard, it also fits our commitment to being a responsible and sustainable contributor to Western Canada's economy for decades to come."

The 185,000 square foot TGF plant contributes more than $100 million annually in economic impacts to southern Saskatchewan by purchasing more than 400,000 metric tons of grain and other starch-rich crops from 400 plus producers. The plant also processes and sells up to 160,000 metric tons of dried distillers grains (DDGs) every year.

"We are very pleased that our business is being acquired by FCL, a long-term and trusted customer of TGF and one of the most stable and successful organizations in Western Canada," commented Calvin Eyben, president of TGF. "This is a big win for TGF, FCL, the province of Saskatchewan and all of our stakeholders. To our valued customers, suppliers and other business partners, it will be business as usual for TGF and we don't anticipate any interruptions during this transition period."

FCL is planning to build on what TGF has established by investing in making the plant more efficient and pursuing carbon capture and storage technologies.

"Two of our deepest connections to Western Canada are agriculture and energy," said Pam Skotnitsky, FCL vice president of strategy. "To be able to invest in both through a local business that is already creating positive economic impacts is really an ideal situation for FCL and the Co-operative Retailing System."

FCL will continue to operate TGF with its 45 existing employees who have built up the plant and business over the last decade. TGF will keep working directly with all of its existing clients and partners.

"We look forward to welcoming these new team members and working with them on bringing improvements to the plant that they've already invested so much in," said Skotnitsky. "As part of the Co-operative Retailng System that reaches 780 gas bar and card lock locations, they're having an impact across Western Canada."

The sale of TGF, subject to certain closing conditions, is expected to formally close by May 31.