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Rentech abandons biofuel plans in favor of wood pellets

Rentech’s bio-based jet fuel facility promised for northern Ontario has not materialized, and the company is now pursuing the wood pellet industry. Rentech recently acquired wood chip processor Fulghum Fibres, based in Georgia, and is in the process of purchasing two wood processing facilities in northern Ontario to be converted to the production of wood pellets.

The company was allocated wood fibre by the Ontario government for the biomass fuel facility proposed for White River, Ont. Instead, it will use the fibre allocation to make wood pellets for Ontario Power Generation’s Atikokan power station and a U.K. power utility.

“Today’s announcements launch us into the wood fibre and pellet supply business, with immediate cash flow and significant growth opportunities, and allow us to take advantage of our fibre relationship in the province of Ontario,” said D. Hunt Ramsbottom, president and CEO of Rentech. “With sustainable fibre supply from Crown forests, Rentech will continue to pursue First Nations partnerships and opportunities for economic development associated with our Ontario projects.”

According to a Rentech press release, the company has exclusive rights to acquire a former oriented strand board processing mill from Weyerhaeuser in Wawa, Ont. Rentech expects to convert the plant for production of approximately 360,000 tonnes/year of pellets. The full output of pellets from this facility will be sold under a long-term contract to Drax, a utility company in the U.K., with the first delivery scheduled for the fourth quarter of 2014.

The Wawa facility is expected to consume approximately 710,000 tonnes of certified sustainably managed Crown fibre annually and employ approximately 40 full-time employees.

A smaller wood pellet facility is planned for a former particleboard processing mill, to be purchased from Atikokan Renewable Fuels in Atikokan, Ont. Rentech will acquire the OPG pellet supply contract as part of the deal with Atikokan Renewable Fuels. This plant will be converted for production of approximately 125,000 t/y of pellets to supply 45,000 t/y to OPG, with the balance to be sold under the Drax contract unless OPG exercises its option on an additional 45,000 tonnes. The first delivery of pellets under the OPG contract is scheduled for the first quarter of 2014.

The Atikokan facility is expected to consume about 250,000 tonnes of Crown fibre annually. Rentech has formed a partnership with Great North Bio Energy to continue to work with First Nations in the development and operation of the Atikokan project.

According to the company, operating these two plants would make Rentech the largest producer of industrial wood pellets utilizing fibre from Eastern Canada.

Rentech’s acquisition of Fulghum Fibres also brings with it a joint venture with Graanul Invest, a large European producer of pellets, for the development and construction of pellet plants in the U.S. and Canada.