Company to build $124 million wood waste pellet plant at Louisiana Port

A new company, called Point Bio Energy, LLC, is developing a $124 million wood pellet project at the Port of Greater Baton Rouge in Louisiana.

The plant, which plans to begin deliveries late in 2011 is expected to produce 450,000 metric tons of pellets. Company officials boast of the site’s ideal location to shipping and international markets and said it has negotiated letters of intent with local feedstock suppliers and a European buyer at attractive terms.

Point Bio Energy CEO Bill New said renewable energy requirements in the European Union are driving demand for the wood pellets, which power plants burn as fuel. Wood pellets provide roughly the same amount of energy as low-grade coal and can be burned in coal-fired power plants. New said that European demand for wood pellets, now around 8 million tons per year, is expected to double or triple over the next decade. Shaw Capital, Inc. and LaPointe Partners are helping to finance the project.

Point Bio Energy, LLC is developing a wood pellet project at the Port of Greater Baton Rouge in Louisiana with the assistance of Shaw Capital, Inc. and LaPointe Partners.

Wood pellets consist of debarked, dried, unitized, compacted and pelletized wood that is suitable to be burned as a green fuel. The 400,000 metric ton per year wood pellet facility will receive the feedstock for the plant from the underutilized wood basket in the Baton Rouge area as well as by barge from the Mississippi River, Atchafalaya River, Red River, and the Intracoastal Waterway.

Point has negotiated letters of intent with local feedstock suppliers and a European buyer at attractive terms. Point has also gone through an extensive technology and EPC selection process to enable utilization of proven state-of-the art equipment working synergistically throughout the facility. The company will have the storage and loading capabilities at the existing deepwater port for ocean going ships delivering the pellets to both European power generators and domestic customers.

Construction is expected to start in the third quarter of 2010 and commercial pellet manufacturing operations are expected to commence in the last quarter of 2011.

The site provides superior logistical flexibility with truck, rail, barge and Panamax vessel access. The land secured at the Port has existing roadways with direct access to major transportation arteries, unit train rail capacity, deep water and barge docks, fire water protection system, weight scales, port cranes, security, drinking water, natural gas and power. By being located directly on a deepwater port, Point has a cost advantage to other projects of $10 to $25 per ton due to the avoidance of double-handling of the wood pellets.

The European wood pellet market is well established with existing and expanding power generators aggressively seeking new sources of fuel to meet renewable fuel mandates. The European market for fuel pellets was approximately 7 million metric ton per year in 2007 and 9.5 million ton in 2008. It is expected to continue to grow by 25 to 30 percent per year in the coming years with large users paying approximately $190 per ton CIF at North European ports.

The Company considers the permitting for the wood pellet operations at the Port to be streamlined and believes that minor source air permits can be secured for the project on a timely basis without public hearings.

Utilizing an experience engineering and construction contractor along with the proven wood pellet technologies that will be used for the facility, which are already used in many other plants in operation today minimizes the technology risks.

Experienced Management Team. The senior management team has over 100 years of combined experience in forest products, biomass processing and large capital projects. The team has significant experience with international sales and distribution of wood and fiber products.

Feedstock Advantage. The Plant will obtain sustainable harvested round wood as the feedstock for the wood pellet plant from land located close to the deepwater production facility and will also be able to take delivery of wood delivered by barge from a number of locations on the Mississippi River, Atchafalaya River, Red River, and Intracoastal Waterway through existing barge unloading facilities.