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Pacific Bioenergy signs new, long-term pellet supply agreement

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Pacific Bioenergy has entered into a long-term off-take agreement for wood pellets with a major Canadian sawmill.

British Colombia’s Skeena Sawmills has recently built a new ‘state of the art’ pellet plant adjacent to its sawmill in Terrace, BC. Production at the mill is set to commence in Q1 2019.

Under the terms of the new off-take agreement, Pacific Bioenergy, a Canadian wood pellet fuel provider, will purchase all of the pellets produced at Skeena’s pellet plant. According to a company statement, this supply of pellets will go towards supporting Pacific Bioenergy’s long-term supply agreements with power producers in Japan.

“Skeena’s pellet plant provides a critical outlet for residual fibre from the sawmill and builds on our commitment to maximizing value from the forest resource and generating local jobs from local logs in Northwestern British Columbia,” said Rick Harris, vice- president of sales and marketing for Skeena Sawmills.

“Our $20 million investment to build a pellet plant, combined with this long-term strategic partnership with PacBio to serve international markets for bioenergy, supports the sustainability of both our business model and the regional forest economy.”

 

Growing markets

Recent months have seen growing evidence that Japan is developing into a key market for wood pellets.

In November 2018, Enviva announced an agreement making it the sole supplier of wood pellets to Mitsubishi’s new biomass plant. The US producer is set to supply 180,000 and 450,000 MTPY to the new facility.

Also in November, Toshiba announced a 20 billion yen (€156 million) investment into a new biomass plant. Construction on that facility is set to begin in autumn 2019, with the plant going into operation in 2022.

Speaking about his company’s new agreement with Skeena, Pacific Bioenergy’s president John Stirling said, “This agreement with Skeena Sawmills contributes to our growing presence serving Japan’s demand for bioenergy products and advances our vision of bringing greater value to B.C.’s forest industry.”