Chesapeake site chosen for wood pellet exports

Dec 08, 2023

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A company that makes wood pellets for sale to United Kingdom and European utilities has established a foothold in Chesapeake.

Richmond-based Enviva LP bought the Giant Cement marine terminal near Paradise Creek in Chesapeake Feb. 3 for $11.7 million, city records show.

The company plans to load ships with wood pellets manufactured at a new plant in Ahoskie, N.C.

The Ahoskie plant will begin supplying the Chesapeake facility by the fourth quarter of this year.

In the meantime, Enviva will upgrade and expand the terminal for parking and for the storage and distribution of the pellets.

Wood pellets must be stored in a dust- and moisture-free environment.

Giant Cement will continue to use a portion of the terminal, a press release said.

The pellets will be trucked from the Ahoskie plant to the Chesapeake facility, a trip of about 80 miles, where they will be stored in two silos, each with the capacity to hold 31,500 metric tons of pellets, said Enviva spokeswoman Elizabeth Woodworth.

Chesapeake City Council approved the company's request Feb. 15 to build silos 150 feet tall, exceeding the city's height limitation of 75 feet.

In the future, Enviva may rail or barge the pellets from Ahoskie to Chesapeake, Woodworth said.

"We prefer barge for environmental reasons," she said.

Norfolk Southern track serves the facility, which has a dock and a water depth of 38 feet.

The Chesapeake facility will load at least two to three ships every 10 days with 40,000 metric tons of pellets for each ship, Woodworth said.

The ships will discharge the pellets at ports in the U.K., Belgium and The Netherlands.

Woodworth said Enviva is negotiating with a local ship agent to handle ship operations so she can't divulge the company's name.

The Chesapeake facility will have the capacity to export 3 million metric tons of pellets a year, the company said.

Enviva CEO John Keppler said in the press release that the terminal's location will decrease supply chain transportation time and costs for buyers.

Enviva will hire 12 permanent workers at the facility, a number that will double in three years, the company said.

Enviva announced the new Ahoskie plant in December.

Enviva will invest $52 million over the next three years and create 53 jobs.

North Carolina gave Enviva a $270,000 grant for construction of the plant.

The Ahoskie plant is just the beginning for Enviva.

Enviva is planning to develop at least two additional manufacturing plants in North Carolina and Virginia, with site selection expected to be completed within 18 to 24 months, the company's website said.

Enviva has been supplying wood chips and wood pellets to U.S. and European customers for the production of heat and electricity since 2007.

Enviva began manufacturing wood pellets at a 60,000-ton plant in Belgium this year.

Enviva bought CKS Energy Amory and Piney Woods Pellets in Mississippi and got a contract to supply 480,000 metric tons of wood pellets to Belgium-based Electrabel, a subsidiary of global utility GDF SUEZ Group.

Enviva has sold wood pellets under the Intrinergy Holdings LP name since 2007, Enviva's website says.

Intrinergy was founded in 2004 to supply wood chips and pellets to utilities and other corporate and industrial buyers.

Europe and the U.K. are expected to buy 80 million green tons of wood a year, according to William Perritt, executive editor of Wood Biomass Market Report for Risi, a research firm.

One ton of green wood equals 1/2 ton of wood pellets.

The United Kingdom needs 45 million green tons a year, but produces only 10 million tons a year, Perritt said.

"They are looking to North America, especially the southern United States, considered the Saudi Arabia of wood biomass," Perritt said.

Even South America is getting in the race.

Brazilian pulp and paper producer Suzano will invest $800 million in three plants in northeast Brazil to produce 3 million tons of pellets using eucalyptus as a wood source to supply the U.K. market.

New European and U.K. plants are expected to open between now and 2015, Perritt said.

"Assuming these new wood-fired plants come online, the question is: Where will the wood come from?" he said.

U.S. producers have shipped at most 1 million tons a year to Europe and U.K. buyers, Perritt said.

Demand from Europe and the U.K. has sparked a flurry of wood pellet manufacturing projects in the southeastern U.S., such as Enviva's in North Carolina and Chesapeake.

"Enviva is one we are closely watching because they are using a very diversified approach to reach this new market," Perritt said. "They are taking a number of approaches to get into the market."

Eden Pellets, based in Colorado, is expected to build a 60,000-ton-a- year wood pellet plant at the former Chesapeake Hardwoods plant in Chesapeake.

The pellets will be trucked north and shipped to Europe in containers, according to a company press release.

Company officials couldn't be reached for comment.

Georgia Biomass will start manufacturing wood pellets this quarter at a plant in Waycross, Ga., an investment of $172 million.

The plant will have the capacity to produce 825,000 tons a year.

The pellets will be shipped to a marine terminal in Savannah that can handle 800,000 tons of wood pellets a year.

The Savannah facility is the only marine terminal on the East Coast to store and load wood pellets at this time.

Georgia Biomass is a partnership between German-based energy giant RWE Innogy and Sweden's BMC, or BioMass Capital Management.

Wood Fuel Developers of Chester said last year that it would build an $18.7 million wood pellet plant in Greensville County to manufacture 100,000 tons a year.

"The Greensville facility was supposed to open last year but was confronted with permitting issues," Perritt said.

Instead the plant will open in 2012.

The company announced in January that it will build another plant in Waverly to produce 125,000 wood pellets a year.nib

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