Highlights from a Pellet Export Project

By Luke Geiver | September 04, 2012

For pellet producing companies or cooperatives looking to invest in a North American export terminal and the infrastructure required to operate overseas, a project between the Prince Rupert Port Authority in British Columbia and Pinnacle Renewable Energy Group provides several highlights of what to expect. The project will allow Pinnacle to convert a former grain handling terminal defunct for over two decades into a storage and exporting facility capable of shipping roughly two million metric tons of wood pellets per year.

For starters, the project shows that pellet producers looking to own or operate an exporting terminal better not be waiting for an invite from a nearby port authority. Ken Veldman, director of public affairs for the PRPA said there was no call for pellet export projects from his team. “It wasn’t about the need for additional capacity by the port,” he said, “it was a proposal brought forward to us (by Pinnacle).”

Next, a producer needs to understand the financial responsibilities of each side. In this case, and in most every case, according to Veldman, all of the investment to upgrade a terminal will be made by the project’s proponent. The port will play an advisory role and help in the design and engineering that goes along with a terminal’s retrofit, mostly however, just verifying that a design change is possible, Veldman said.

An investment towards a terminal site used for exporting also means there are regulatory strings attached. In addition to the myriad of environmental assessments needed for an export site, the Prince Rupert project also acts as a reminder that money can’t buy total operational freedom. Pinnacle will have to adhere to guidelines set forth by the port authority such as noise limits or dust collection parameters. If the operations at the export facility somehow fall below the requirements of operation, Veldman said, there are very detailed adjustment and mitigation plans that will allow the port to halt production at the terminal site. “The port,” he said, “is the regulator for that terminal going forward.”

As for Veldman’s perspective on the addition of Pinnacle to the port, he said the pellet company completely matches its intended purpose, to support Canadian trade. Because the project will be financed almost entirely by the project’s proponent, there is no requirement by the port for Pinnacle to provide pre-established contracts that will indicate a solidified revenue stream for Pinnacle in the near- or long-term.