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MARKET WATCH

Enova buys wood pellet mill, signs supply agreement with Plum Creek

Posted by Suz-Anne Kinney on September 23, 2013
Enova Energy has taken the first step towards capturing a share of the export wood pellet market. The company has announced that it will buy the Southeast Georgia Biofuels wood pellet plant in Nahunta, Georgia. The plant is currently producing 75,000-100,000 tons of pellets annually, and Enova will install additional equipment to bring capacity up to 150,000 tons annually. Once this capacity has been reached, the plant will consume 300,000 tons of wood fiber each year.

Plum Creek announced that they have entered into a 10-year fiber supply and services agreement with Enova to supply as much as 3 million tons of wood fiber annually to three Enova pellet mills in the Southeast. This fiber will be sourced from Plum Creek certified lands and from third party landowners and sawmills. Deliveries are expected to begin in the third quarter of 2014.

Enova has made several announcements about its plans to be a significant player in the Southeast’s export pellet market.  In addition to this purchase, the company has announced it will build three pellet mills in Georgia. They also have an agreement with Georgia Kaolin Terminals for terminal services at the port of Savannah and a letter of intent with the Port of Port St. Joe to ship 1 million metric tons of wood pellets through the port.

Plum Creek also has a more traditional 10-year supply agreement with Drax that will begin in 2014. Under this agreement, the company will deliver up to 770,000 tons annually of sustainably-managed wood fiber from its own lands to two U.S. pellet manufacturing locations, one in Mississippi and one in Louisiana. Plum Creek has more than 6 million acres of timberland in the U.S., all of it certified to SFI standards.

Topics: industrial wood pellets

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