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March 14, 2014

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Technology change not anticipated to impact pellet plans
 
by Edward French

 

     A change in technology for producing the wood pellets at the facility planned by Thermogen Industries in Eastport will not affect the company's interest in the project, according to a spokesman for Thermogen. Scott Tranchemontagne says, "Our commitment to Eastport remains as strong as ever. A change in the technology doesn't change our commitment at all." The different technology will allow the company to produce more black pellets, which are used as a replacement for coal.
     On March 10 it was announced that Thermogen Industries, the pellet manufacturing subsidiary of Cate Street Capital, will utilize Zilkha Biomass Energy's proprietary process to produce black pellets at Cate Street's Millinocket location. Previously, Thermogen planned to use a microwave technology to produce torrefied wood pellets at both the Millinocket and Eastport facilities. The new technology will use a thermal process to produce a black pellet that is "as energy rich and water resistant" as the torrefied pellets, says Tranchemontagne.
     He says the change in the process for producing the pellets will allow the Millinocket mill to start up more quickly and also to produce three times as much product. Previously, Thermogen planned to produce 100,000 metric tons a year at Millinocket; now the estimate is for over 300,000 tons. Also the estimated number of employees has been increased from about 35 to 50.
      Tranchemontagne notes, "It's a better investment for investors," and also the potential customers told the company "they wanted us to have more capacity."
     When Thermogen first announced its plans for the Eastport facility in February 2013, the production was estimated at 200,000 to 300,000 metric tons a year, with an estimated 60 to 90 workers. Tranchemontagne says it's too early to say if the technology change will affect the company's projections for annual production or number of employees at Eastport.
      The company has identified two or three issues that have raised concerns about the Eastport site, which would be on a portion of the 40-acre former BASF site on Broad Cove. However, he adds, "They're not any deal-breakers."
      "Our technology change would work well with the site," he says. "It really doesn't change the project's footprint very much." Company representatives will be in Eastport in a few months to provide an update on the project.
      The site's location on property owned by the Eastport Port Authority and next to the Estes Head shipping terminal "is what makes Eastport so attractive to us," Tranchemontagne says. The company plans to ship the pellets to Europe, along with selling them to large institutions such as colleges or hospitals in the northeastern U.S. and eastern Canada.
       Zilkha Biomass Energy, based in Houston, Texas, has been operating a black pellet plant in Crockett, Texas, since 2010. Zilkha plans to have another plant producing 275,000 metric ton per year online in early 2015 in Selma, Alabama. The company is actively licensing its technology to third party producers to expand the supply of available black pellets and has now agreed to license the technology to Cate Street Capital.
     "Partnering with Zilkha will allow Thermogen to begin producing more pellets more quickly, tripling annual production. This will mean more jobs for Maine, and a stronger financial footing in Thermogen's early stages," says John Hallé, president of Cate Street Capital, in a release. "Our customers are saying we must have more capacity from the start, and Zilkha Biomass Energy's technology will help Thermogen meet that need."
       According to the release from Zilkha, biomass pellet export volumes from North America to Europe have steadily increased over the past several quarters, and the market for the renewable product is expected to grow rapidly. Black pellets offer an alternative to conventional pellets because of their water‑resistance, durability, reduced dust problems, higher energy content and lower shipping cost. Black pellets handle like coal, and they serve as an alternative for coal‑firing plants, which are under pressure to replace their fossil fuels with cleaner, sustainable sources. The black pellet can be used in converted coal units as well as co‑firing markets in Europe and Asia.

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