With the lease of the Port of Beaumont in Texas, Zilkha Biomass Energy will join the growing list of American companies shipping wood pellets to feed Europe’s booming biomass power market.
The company is building an inventory of between 3,000 and 5,000 tons of its waterproof black pellets for the first shipment, expected to sail in April. The pellets will come from its plant in Crockett, Texas, which has a nameplate capacity of 40,000 tons, according to company CFO Glenn Dillon. “Based on our current capacity, it’s estimated we’ll be shipping every other month,” he says.
It will be the first shipment from the U.S. of black pellets, he adds. Zilkha’s waterproof black pellets have a high energy density, are abrasion resistant, and can be stored outside like coal, according to the company.
Zilkha conducted a test shipment in October before signing the lease agreement, which extends through the end of this year. After that time, the company will assess its needs, Dillon says.
The economics are more favorable in Europe than in North America, he says, as power pricing in Europe is higher. “We are working strategically with some U.S. utilities. We don’t have contracts with any yet. But we are focused toward the European power market.” Zilkha’s customers are in northern Europe, he says, declining to specify, but adding that they are all utilities.
The Zilkha company name was established in 1984 with a strategy centered around oil and gas, but it switched its concentration to wind energy in 2000. Now, the company has updated its focus exclusively to biomass, mainly wood pellets from sawmill residues such as chips, sawdust and shavings, Dillon says.
The company also has an idled plant in Alabama that is expected to resume operation by the end of this year. With the addition of the port to its assets, Dillon says Zilkha plans to increase production. “We’ll likely expand the Crockett plant to a higher capacity,” he says.