Sherritt International Corp. has partnered with the Ontario Teachers Pension Plan to create a $1.5-billion project to produce synthetic natural gas from coal.

Details of the proposed Dodds-Roundhill Coal Gasification Project were released in a public disclosure document on the company's website. The application will be submitted for regulatory approval in 2008.

Sherritt, a Toronto-based natural resource company, plans to build a surface coal mine and gasification facility to process coal and produce the gas about 80 kilometres southeast of Edmonton. The project will be managed and operated by Sherritt. The coal feedstock is owned by the Carbon Development Partnership, which is an equally divided partnership between Sherritt and the OTPP.

''The Dodds-Roundhill coal gasification project represents a key step towards Alberta's future as a global centre of excellence in innovative 'clean coal' technology,'' Barry Hatt, senior vice-president of Sherritt, said in the report.

''This new technology will help preserve natural gas resources for higher value uses and unlock the full energy potential of coal. This new energy source can support the development of Alberta's vast oilsands resources in an environmentally sustainable manner,'' he said.

Following regulatory approval, which the company expects in 2009, construction would begin mid-2009 and the start up of the plant would be 2011, the company said.

The proposed mine and plant are the first stage of the project. The company's long-term plans involve as many as four similar facilities.