Rentech provides update on wood pellet production

Rentech, a Los Angeles-based wood pellet manufacturer, has provided an update on the progress of its Canadian pellet operations as part of the company's fourth quarter and full year financial results report.

Keith Forman, CEO of Rentech, said: "We shipped approximately 48,000 tonnes of pellets to Drax in the first quarter of this year, produced from the Wawa and Atikokan plants [based in Canada].

"We are preparing for the final phase of corrections to the conveyors at both plants by this summer. We are optimistic that these final conveyor replacements will enable the plants to continue ramp-up to full capacity."

The capital expenditures estimate for the Atikokan and Wawa plants of approximately $145 million (€128m) is unchanged, with approximately $21 million remaining to be spent as of the end of 2015.

The estimate for capital expenditures does not include contingency costs to address any other unforeseen issues that may arise during ramp-up of the facilities.

Rentech has shipped a total of approximately 65,800 metric tons of wood pellets to OPG since Atikokan began producing, which has to date satisfied its contractual obligations to OPG.

Rentech also provided an update on the state of equipment repairs and replacements that have taken place at both facilities.

In a statement, the firm said: "All of the truck dump hopper modifications at Atikokan have been completed, and the truck dump hopper is performing as expected.

"The first group of the faulty conveyors at the Atikokan facility was replaced at the end of 2015 and the conveyors' performance is currently being evaluated as part of the plant's operations. The remaining work to address problems with the Atikokan facility conveyor systems is expected to continue through mid-2016.

"The Atikokan facility is expected to reach full capacity this year at some point after the conveyor work is completed, barring any other possible unforeseen issues that may arise during continued ramp-up."

The firm added: "All of the equipment at the Wawa Facility has been commissioned and the plant has been producing an increasing quantity of wood pellets.

"However, as disclosed last year, the company discovered during the ramp-up of the Wawa facility the need to modify the front-end system of the facility that handles logs and feeds them into the chipping process and to modify or replace a significant portion of the plant's conveyance systems.

"The modifications of the front-end system and the first phase of modifications of the plant's conveyance systems were completed in late 2015. The remaining work to the conveyor systems is scheduled to be completed by mid-2016."

In light of the setbacks Rentech has experienced at the Wawa Facility, the company is evaluating the production capacity of the plant.