Mercer International Inc.

It may also be a partial relief for customers and suppliers that have suffered the impact of higher energy prices. In Western Canada, decreased log harvesting levels and related sawmill curtailments are putting upward pressure on potwood prices, and as a result, we expect pricing to be generally flat in Q4. We have made steady progress on our 2022 CAPEX program in the quarter. The majority of the program is focused on high-return projects that will drive new product development, ESG advances, productivity improvements, and input cost reductions. Two of the larger projects are new woodrooms at Selgar and Peace River. We expect the Peace River Woodroom to begin operating late in fourth quarter and the Selgar Woodroom to begin operating in the second half of next year. These projects will generate high returns in the form of lower wood costs and have considerable carbon reduction attributes which will help us achieve our carbon reduction goals. In keeping with our carbon reduction strategy, we have commenced construction on a lignin development center that will include a lignin extraction pilot plant. When completed in late 2023, the plant will employ a leading-edge technology that will allow us to look at commercializing derivatives of lignin. We also commence a construction on a $27 million expansion project at our Spokane Mass Timber Plant. These investments will allow this state-of-the-art facility to fully utilize a more varied raw material mix, add glulam to our product portfolio, and increase finger joint production. This is a first step in what will ultimately be an expansion of CLT capacity in anticipation of our efforts to steadily increase our order book for mass timber products, which we expect to begin to materialize in sales next year. We remain satisfied with the pace of the ramp up of this business. And we are currently planning for the permanent repairs required for Stendhal's fire damaged chip file infrastructure. We expect the repairs to begin in Q4 during Stendhal's planned maintenance shut, with the final repairs expected to be completed in the second quarter of next year. Currently, the mill is running at about 90% of capacity, and we expect this percentage to increase to close to 95% with the planned Q4 repairs. And we think about climate change and the rapid shift occurring regarding reducing carbon emissions. Products like lignin, mass timber, Green energy, extractives, lumber, and pulp are all products that will play an increasingly important role in displacing carbon-intensive products. Products like concrete and steel for construction, plastic packaging, fossil fuel generated electricity, and synthetic fragrances and flavors, even synthetic textiles. We're committed to our 2030 carbon reduction targets and believe our products form part of the climate change solution. In fact, we believe that the fullness of time demand for low-carbon products will dramatically increase as the world looks for solutions to reduce its carbon emissions. As Dave noted, we are so confident in our ability to meet our carbon emission reductions target that we converted our German revolving credit facility to a sustainability-linked loan, making us part of a small group of wood product producers willing to invest in carbon emission reduction targets in favor of modest reductions in our costs of borrowing. Thanks for listening, and I will now turn the call back to the operator for questions. Thank you.

As a reminder, yes? It's Dave here. Just before we turn it to questions, it's been pointed out to me that there might have been some callers that were having problems getting into the call today, so I just wanted to let folks know that I think it's sorted out now, but if you missed part of the call, Don't hesitate to ask your questions. Juan Carlos and I have lots of time here today. And just to remind folks, too, if you did miss part of it, the call is being recorded and you can pick it up at a later date. Sorry, Sarah, I'll turn it back to you now for Q&A.

That's no problem. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star 1 on your telephone keypad. To withdraw your question, please press star two. Please ensure your lines are unmuted locally as you will be advised when to ask your question. Our first question comes from the line of Sean Stewart from TD Securities. Please go ahead.