An Ottawa renewable energy firm has teamed up with Alberta's largest sawmill operator to turn wood waste into synthetic oil.

Ensyn Technologies is the world leader in what is called fast pyrolysis, a process that can turn 400 tonnes of sawdust and bark into 85 million litres of oil per day.

Tolko Industries runs a sawmill in High Level, Alta., about 700 kilometres north of Edmonton.

The $70-million plant will be built next to the sawmill and is expected to be running in late 2012.

Randal Goodfellow, senior vice president at Ensyn of Ottawa, told CTV Ottawa that the plant will be four times the size of one they've operated in Renfrew, Ont. for years.

The fuel is used to run turbines to produce electricity. There will be some chemical by-products as well.

"We are excited about this because it is the world's largest plant and we think it will be a kick start for the forest industry and other companies can see just exactly how it works," said Goodfellow.

There are already seven other similar plants operating in North America. They can take almost any kind of bio-waste and produce fuel or chemicals.

Turning waste-wood into fuel will create about 16 new jobs in Alberta.