News | August 2019

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Pinnacle, Tolko Teaming Up Again

Pinnacle Renewable Energy has entered into a limited partnership agreement with Tolko Industries Ltd. to build Northern Pellet Limited Partnership, a new industrial wood pellet production facility in High Level, Alberta. The facility will use wood fiber sourced primarily from Tolko’s existing sawmill in High Level. The facility is expected to have a run-rate production capacity of 170,000 to 200,000 metric tons per year.

Annual production volumes from the mill will be sold through Pinnacle’s contracted backlog of long-term, take-or-pay off-take contracts. Under the terms of the partnership, Pinnacle and Tolko will each own a 50% interest.

“We look forward to expanding our business relationship with Tol­ko, growing our production platform in Alberta and further diversifying our regional fiber supply,” comments Rob McCurdy, CEO of Pinnacle. “We have established a strong working relationship with Tolko through the construction and operation of our jointly-owned Lavington, BC production facility, which was completed safely, on-time and on-budget. Our partnership with Tolko offers Pinnacle the ability to diversify the business further and position the company well to implement our growth strategies.”

Under the terms of the Partnership, Pinnacle will operate the facility and manage all aspects of customer relations, marketing, sales and logistics. Tolko will supply both heat energy and fiber to the facility under long-term supply agreements. The facility, which will be built on land owned by Tolko, will begin con­struction in the third quarter of 2019. Initial wood pellet production is expected to commence in fourth quarter 2020. The capital cost of the facility is expected to be $54 million.

Scott Bax Becomes Pinnacle COO

Pinnacle Renewable Energy announced that Scott Bax, senior vice president, operations, is succeeding Leroy Reitsma as Chief Op­erat­ing Officer, reporting to CEO Rob McCurdy.

Bax joined Pinnacle in 2013 and has been instrumental in the safe and cost-effective production of quality wood pellets from Pinnacle’s facilities. Prior to joining Pinnacle, Bax acquired more than 20 years of forestry experience in various logging and wood manufacturing operations throughout Canada and the U.S.

Reitsma is transitioning from his current role to focus solely on Pinnacle’s U.S. development projects. Reitsma joined Pinnacle in 2007.

The U.S. ships practically all of its pellets to three countries: the United Kingdom, Belgium and Denmark.

Activities Trending Positives For Enviva

The world’s larger producer of wood pellets, U.S.-based Enviva, reports it executed a new, firm 5-year take-or-pay off-take contract with RWE Supply & Trading GmbH to service its growing demand for wood pellets in the Nether­lands and elsewhere. Deliveries under the contract are expected to commence in 2020 with volumes of 200,000 metric tons of wood pellets.

Enviva’s previously announced 18-year take-or-pay off-take contract with Sumitomo Corp. to supply wood pellets to a new biomass power plant located in Fukushima Prefecture in Japan is now firm, as all conditions precedent to the effectiveness of the contract have been satisfied. Deliveries under this contract are expected to commence in 2022 with volumes of 440,000 metric tons of wood pellets.

Enviva also said it expects the Hamlet, NC wood pellet plant to achieve commercial operations this summer and reach its nameplate production capacity of approximately 600,000 metric tons in 2021. The partnership is finalizing construction of the Hamlet plant and has be­gun commissioning major process islands.

Enviva continues to make progress on pre-construction activities for a deep-water marine terminal in Pascagoula, Miss. and a wood pellet production plant in Lucedale, Miss. In addition, Enviva continues to evaluate additional development locations to support existing and anticipated future off-take contracts, including sites in Alabama and Mississippi around the planned Pascagoula terminal, as well as locations near Enviva’s existing terminals in the Port of Chesapeake, Va. and the Port of Wilmington, NC.

Graanul Invest Buys Texas Pellets Mill

Graanul Invest affiliate Wood­ville Pellets, LLC submitted the winning bid in an auction conducted on May 9 for the assets of Texas Pellets, Inc. and German Pellets Texas, LLC (Texas Pellets). The assets include Texas Pellets’ Woodville, Tx. pellet manufacturing plant and its Port Arthur, Tx. port terminal.

The transaction was approved by the U.S. Bankruptcy Court for the Eastern District of Texas after a hearing held on May 15. In connection with the acquisition, Graanul Invest received financing from funds managed by affiliates of Apollo Global Management, LLC.

The estimated manufacturing capacity of the wood biomass pellet plant in Woodville is 450,000 metric tons of pellets per year. The Port Arthur terminal has a total storage capacity of 68,000 metric tons, and is capable of loading vessels up to approximately 60,000 metric tons.

Acquisition of Texas Pellets’ assets enables Graanul Invest group to expand its business to the U.S. to ensure greater security of supply to its customers. It also provides better logistical solutions for entering the Asian market, in particular the fast-growing markets in Korea and Japan. 

With 11 pellet plants located in the Baltics, the Estonia-based Graanul Invest group’s annual production volume is 2.2 million tons of pellets, making it the biggest pellet producer in Europe. Acquisition of the Texas Pellets pellet manufacturing plant offers a possibility to increase the groups production capacity up to 25%.

United Kingdom Goes For Net Zero Carbon

The United Kingdom has become the first major economy in the world to pass law that requires the UK to bring all greenhouse gas emissions to net zero by 2050, compared with the previous target of at least 80% reduction from 1990 levels.

The UK has already reduced emissions by 42%. The UK’s 2050 net zero target was recommended by the Committee on Climate Change, the UK’s independent climate advisory body. Net zero means any emissions would be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage.

The law comes shortly after the UK went two weeks without burning coal for electricity, the longest stretch without coal since the industrial revolution. The target was announced earlier by outgoing Prime Minister Theresa May, who called it a crucial plan for protecting the planet.

The plan will require Britain to add vast amounts of renewable energy. “The UK kickstarted the Industrial Revolution, which was responsible for economic growth across the globe but also for increasing emissions,” Chris Skidmore, energy and clean growth minister, comments. “Today we’re leading the world yet again in becoming the first major economy to pass new laws to reduce emissions to net zero by 2050.”

Attis Completes Deal For Biofuels Plant

Attis Industries, a diversified innovation and technology holding company, finalized a deal with motor fuels distributor Sunoco to purchase an ethanol plant for $20 million in Volney, NY. The former Miller brewing site was closed in 1994 before reopening in 2008 as an ethanol plant. One project Attis has planned is extracting wood biomass from the surrounding area to produce cellulosic fuel.

New York has set ambitious goals to adopt the use of renewable energy. The self-sustainable plant could help New York meet objectives for reducing greenhouse gas emissions.


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