The North Carolina State Ports Authority board approved a deal Thursday with WoodFuels to build a wood pellet export facility at the Port of Morehead City.
According to terms of the 20-year agreement, WoodFuels would finance and build a $25 million export facility at the port to receive, store and load wood pellets for export to Europe, where they would be used as a renewable energy source.
The facility is expected to receive its first pellets for shipment in late 2014. After the initial operational year, revenue will range between $1.2 million and $2 million annually. On average, the deal could result in $840,000 annually in ports operating revenue that would be used to reinvest into the Port of Morehead City. It is also expected to support at least 150 jobs between the port and other state locations.
Several months ago the port authority received the go-ahead from the state to lease land at the Port of Wilmington to Enviva Holdings for a wood pellet facility. Officials estimate it will generate at least $1.25 million in annual revenue.
The port authority is finalizing details of the agreement and construction is expected to start soon on the Wilmington facility, spokeswoman Laura Blair said. The Enviva facility will be located near the bulk and breakbulk commodity areas in the port.
The agreement calls for Enviva to build two storage domes, a railcar unloading station and a ship loader and conveyor system. Enviva will finance the construction, estimated to cost $35 million, and operate it. The initial lease term is 21 years, with two five-year renewal options.
The wood pellet facility is scheduled to be operational by January 2015.
Enviva, a Maryland-based wood pellet exporter, currently operates two wood pellet mills in North Carolina. It also has plants in Alabama and Mississippi, with a fifth plant under construction in South Hampton County, Va.
According to North Carolina State University, U.S. production of wood pellets is expected to increase from 3 million tons four years ago, to nearly 10 million tons by 2015.
“North Carolina is well-positioned to be part of an emerging biomass industry, and continued improvements at our state ports will help tremendously,” said Agriculture Commissioner Steve Troxler. “In addition, new opportunities such as this one will help revitalize our state’s forest products industry.”