News | February 2015

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Enviva, Hancock Form Pellet Partnership

Enviva Holdings, LP and John Hancock Life Insurance Co. have partnered with plans to develop industrial wood pellet production plants and marine export terminals in the Southeastern U.S. Their initial project, through their affiliates, Enviva Development Holdings, LLC and Hancock Natural Resource Group, Inc., will include an investment of up to $320 million in Enviva Wilmington Holdings, LLC and the construction of an industrial wood pellet plant in Sampson Coun­ty, NC, and a marine export terminal at the Port of Wilmington, NC.

Enviva will serve as the managing member and operator of the joint venture, which expects to commence construction of the Sampson plant and Wilmington terminal immediately. Wood pellet production from the Sampson plant will be exported through the Wilmington terminal under long-term contracts with major European power generators.

Hancock Natural Resource Group is composed of three divisions: Hancock Timber Resource Group, Hancock Agricultural Investment Group and Hancock Renewable Energy Group.

Enviva affiliates currently own and operate five wood pellet production plants throughout the Southeastern U.S. and export products through terminals in Chesapeake, Va. and Mobile, Ala.  It is also expected to close on its purchase of the Green Circle Bio Energy pellet operation in Cottondale, Fla.

In the past three years Enviva has built and started up plants in Ahoskie, NC; Northampton County, NC and Southampton County, Va., while operating purchased plants in Amory, Miss. and Wiggins, Miss. The combined wood pellet production capacity from these five facilities is 1.6 million metric tons.

Deere, Tigercat, Others Book InWoodsExpo

John Deere, Tigercat and Barko, in cooperation with their respective local dealers, Stribling Equipment, MidSouth Forestry Equipment and Crouse Truck Parts & Equipment, are the first major companies to book exhibit space with InWoods­Expo 2015. The live forestry equipment demonstration is set for June 18-20 near Hot Springs, Ark.

Other exhibitors of record as of early January included Tuckers Truck, Texarkana Truck Center, Waratah, Cutting Systems, Quadco, Alliance Tire, VPG Onboard Weighing Systems, BITCO Insurance, and Farm Credit of Western Arkansas. A total of upwards of 75 exhibitors is expected, given the improving economy and a healthier forest products industry that is expanding in many locations, including Arkansas, Texas, Louisiana and Oklahoma.

In keeping with the emergence of Tier 4f engine technology and other sophisticated machinery advancements, the theme for the event is ‘Tech Up.’

Sponsored by Arkansas Timber Producers Assn. (ATPA) and Hatton-Brown Publishers, the event will again be staged on a previously thinned pine plantation owned and sustainably managed by Weyerhaeuser Co. The tract is con­venient­ly located just off Arkansas highway 128, about 16 miles east of Hot Springs and about eight miles west of Interstate 30.

Larry Boccarossa, ATPA Executive Director and manager of the show, notes the mid-year date was selected in an attempt to distance the expo from the threat of severe spring thunderstorms and/or tornados, which were issues in 2007 and 2011. “It will be a little warmer in June than April or May—average mid-June high in Hot Springs is only 84º—but warmer conditions are better than the threat of severe weather,” he reasons. “Another advantage to having the expo in June is that it will give families a chance to plan a vacation around it. There are lots of attractions to see in the Hot Springs area.”

He notes the expo will incorporate on-site parking and special activities for children for the first time. Continuing education opportunities will again be offered for loggers and foresters.

First held in 2004, the show typically draws several thousand attendees from the ArkLaTex region and beyond. “With Hatton-Brown’s assistance, we’re promoting the 2015 Expo much more aggressively and expect record participation,” Boccarossa says.

For more information, visit ark or phone 501-224-2232.

Potlatch Completes Timberlands Purchase

Potlatch Corp. closed the previously announced purchase of 201,000 acres of timberlands in Alabama and Mississippi from affiliates of Resource Management Service, LLC for $384 million.

Potlatch is a Real Estate In­vestment Trust (REIT) with 1.6 million acres of timberland in ­Alabama, Arkansas, Idaho, Minnesota and Mississippi.

Portucel To Build Pellet Mill In Greenwood, SC

Portucel Group, a leading paper manufacturer based in Portugal, plans to invest $110 million to build a wood pellet manufacturing facility in Greenwood, SC. The plant will produce 460,000 tons annually.

Portucel’s facility will be located in the Emerald Road Industrial Corridor. The company expects to create 70 jobs.

 The Coordinating Council for Economic Development in South Carolina has approved a $150,000 grant to assist with the costs of road, site and infrastructure improvements as well as job development credits related to the project.

  “We are confident that we have found the right partners in South Carolina and that together we can provide a steady source of safe, reliable and renewable energy for the 21st century,” comments Portucel Group CEO Diogo da Silveira.

The company states it has negotiated supply contracts with fixed price and tenure of 10 years, guaranteeing the sale of 70% of the new facility’s output.

Portucel has total paper capacity of 1.5 million tons/year and eucalyptus pulp capacity of 1.3 million tons. Its activities are based at three large scale production mills in Portugal. The Group manages woodlands occupying some 296,400 acres in Portugal.

Pellet Mill Begins Construction This Year

International WoodFuels President Steve Mueller reports its 500,000 ton production capacity wood pellet plant at Sims, NC and its receiving, storage and shipping infrastructure at the Port of Morehead City will be in construction this summer and shipping in the fall of 2016. The Port facility will include 80,000 tons of dome storage, rail and truck receiving, and 1,200 T/H of ship loading capacity.

The pellet plant will produce industrial grade fuel some months of the year, and “thermal” EN+1A product other months, as per customer orders, which is why the storage facility will include two 40,000 ton domes and provide the flexibility to store low-ash biomass fuels for seasonal “just-in-time” supply.

Rentech Focuses On Pellet Plant Startups

Rentech expects both of its Ontario pellet mills at Atikokan and Wawa to be producing pellets in 2015, according to an update of company operations prepared for the Wood Pellet Assn. of Canada Annual Conference held in November in Vancouver.

The Atikokan facility, scheduled to produce 100,000 tonnes annually, was nearing production late in 2014, while the Wawa plant, with 450,000 tonnes annually, is expected to produce pellets for shipment in the second quarter of 2015. The two plants represent an acquisition and conversion cost of $105 million. Rentech purchased both de-commissioned composite board plant sites in 2013. The Wawa plant has a 10-year supply agreement with electricity producer Drax based in the UK. Rentech has a 15-year contract with the Wolfe’s Cover port terminal in Quebec City.

Rentech purchased Fulghum Fibres in 2013 and operates 32 chip mills processing 15 million tons of wood fiber in the U.S., Chile and Uruguay. In 2014, Rentech purchased New England Wood Pellet and three plants with a combined capacity of 240,000 tons of bagged pellets annually.

Rentech’s evolvement was enhanced last April with a $150 million investment from Blackstone/GSO.

In December Rentech, Inc. announced today that D. Hunt Ramsbottom had resigned as CEO and president of Rentech to pursue other opportunities. Keith Forman, a member of Rentech Nitrogen’s board since October 2011, was appointed to succeed Ramsbottom.

Drax Gears Up For Exciting Year

UK electricity generator Drax said it continues to evaluate options for further biomass related capital investments, including development of U.S. East Coast pellet operations.

The company is already building pellet plants in Gloster, Miss. and Bastrop, La., with startups scheduled in the first half of 2015, and is reportedly looking at building one near McComb, Miss.

The company reports it continues to make good progress with its ongoing transformation to a predominantly biomass-fueled electricity generator. It completed the conversion of one coal unit to biomass in May 2013, and completed a second unit conversion in October 2014. It plans to convert a third unit between July 2015 and June 2016. Commissioning of the new on-site biomass facilities at Drax is complete and all four storage domes are now in service. The company is looking at converting a fourth unit as well.

Drax reported on UK government investments in low carbon electricity generation, including the introduction of Contracts for Difference (CfDs), which are long-term contracts. To avoid an investment hiatus in the renewables sector before the CfDs become available, the government introduced a scheme for Investment Contracts under the Final Investment Decision Enabling mechanism. These are “early” CfDs intended to provide greater confidence for investors.

In December 2013, the government advised Drax that two generating units at Drax Power Station—the “second” and “third” unit conversions—were eligible for Investment Contracts. But in April 2014 the government notified Drax that the second unit conversion was no longer eligible for an Investment Contract. However, Drax did not receive a satisfactory explanation for this decision and contested it in court.

In July, following a High Court hearing, the Court declared that the second unit conversion was eligible for an Investment Contract. However, the government appealed this judgment to the Court of Appeal, and in August the Court allowed the government’s appeal and concluded that the second unit conversion was not eligible for an Investment Contract. Having taken legal advice, Drax decided not to appeal this decision.

GES Announces Chip/Pellet Mills

Global Energy Solutions LLC (GES) intends to build a $20 million chip mill, followed by a large pellet plant and a port facility at the Port of Epes in west Alabama (Sumter County) on the Tennessee-Tombigbee Waterway.

“We will be further pursuing our course of expanding U.S. capacities,” comments Peter Leibold, Managing Partner of German Pellets GmbH.

Brazil's TANAC To Build Pellet Plant

TANAC S.A. is constructing a 400,000 tonnes production capacity wood pellet manufacturing facility at its Rio Grande port site in south Brazil. It’s scheduled for completion in early 2016 with the first pellets due for export in mid-2016. A long-term agreement for the supply of wood pellets has been entered into with Drax Group, according to a TANAC statement.TANAC’s primary product is vegetable tannin, a value-added product mainly used by the leather industry, and in water and wastewater treatment. Tannin is extracted from the bark of Acacia mearnsii (also known as Black Acacia or Black Wattle). After removing the bark, the remaining wood is chipped at TANAC’s chip mill; a proportion of these chips will provide the feedstock for the new pellet mill.

All of TANAC’s own plantations are FSC Forest Management certified and local sourcing operations all carry FSC Controlled Wood certification. An important requirement under the Drax agreement is for an independent, carbon stock assessment to be conducted on the plantation area in the Rio Grande do Sul State every two years to ensure carbon stock levels are being maintained.

TANAC’s pellet mill will be the largest in Latin America.

Biomass Power Plant One Step Closer

 Albany-Dougherty Payroll Development Authority approved a $250 million bond issuance for a possible combined heat and power biomass facility to be located at the Albany Procter & Gamble Paper Products Co. in Albany, Ga. The utility scale biomass plant would represent an investment up to $230 million of investment by Albany Green Energy, LLC.

Albany Green Energy will be wholly owned by Constellation New Energy, which is providing financial backing for the project. With final PSC approval, Constellation will sell power created at the biomass plant to Georgia Power and will sell steam to P&G.

 The Albany facility, the second-largest of P&G’s paper products plants, currently utilizes renewable energy from a biomass boiler that provides a large portion of the current steam load at the site. The new biomass project, along with associated upgrades within the manufacturing site, would allow P&G to offset a portion of its natural gas usage with renewable biomass from local sources. The project would help P&G meet its goal of increasing its usage of renewable energy to 30% by 2020.

Beyond the advantages for P&G, the facility has the long term potential to also provide renewable steam for Marine Corps Logistics Base-Albany, helping the base toward its efforts to become the U.S. Department of Defense’s first net-zero installation.

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