Ethanol plant developers sign $200 million engineering pact

Agri-Technology Corp. officials have signed an engineering and construction agreement for their proposed $306 million ethanol
plant, but the plant is far from a done deal.

Tribune Business Editor

A $200 million-plus engineering construction contract has been signed with Lurgi PSI Inc., a Memphis-based engineering firm
specializing in ethanol plants, President Gary Hebener said.

"This means we have accomplished an important and significant milestone," Hebener said. "One must have a contract of this nature
finished, signed and delivered to the banks before the banks can finalize (the funding)."

The contract will become part of Agri-Technology Corp.’s overall financial package, he added. He and his partners have several
hurdles, mainly financial, left to jump. Agri-Technology Corp. has already invested well over $1 million in the project.

But Hebener — who declined to name any of the plant’s private financial backers — is optimistic that the project he has worked on
for the past decade will soon come to fruition.

"I can say with certainty that we will build this plant, and we just accomplished a major goal," Hebener said.

"But (this contract) doesn’t put us in a position to name a specific date," he added. "I do think it’s reasonable to say we’ll have the
funds in place and will begin construction in the spring."

The plant is slated to be built on a 200-acre parcel that Agri-Technology Corp. owns near Malmstrom Air Force Base. The
Montana Department of Environmental Quality issued an air quality permit for the plant last fall.

The plant is expected to take 22 months to build. At the height of construction, Hebener said up to 700 construction workers
would be employed; once the plant is up and running, initial employment is expected to be 116.

Roughly 30 million bushels of barley and 10 million bushels of high-protein wheat will be used to make 100 million gallons of
ethanol annually.

Carter-area farmer Dale Schuler, the past president of the Montana Grain Growers Association, has said that the plant will use
about 20 percent of all grain produced in the state.

The plant also will produce 500,000 tons of wheat and barley meal for animal feed and "vital wheat gluten," a baking additive.

The ethanol produced in Great Falls will be sold to various oil companies throughout the Northwest, Hebener said. As a
pollution-cutting measure, the ethanol is added to gasoline in communities including Seattle, Portland, Spokane and Missoula, he
added. The California market also is growing.

"Great Falls is the chosen location because it’s where the grain is," Hebener said. The city’s transportation infrastructure, the
relatively low cost of electricity and the availability of labor with grain-handling experience also contributed to the decision to bring
the plant to Great Falls.

Mayor Randy Gray said the city, which is not funding any part of the proposed ethanol plant, is backing the project.

"We support that industry coming here and developing an industrial park in that area of town," Gray said. The plant would create
jobs, use Great Falls’ abundant natural resources and provide a secondary market for northcentral Montana’s wheat and barley, he

"There’s absolutely no down side for our community," Gray said.

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