Enviva joint venture to construct S.C. pellet, export facilities

By Erin Voegele | December 09, 2014

Enviva Holdings LP has announced a partnership with John Hancock Life Insurance Co. to develop wood pellet plants and marine export terminals in the southeastern U.S. Construction on a pellet plant and export terminal in North Carolina is expected to begin this month.

According to information released by Enviva, the companies, through their affiliates Enviva Development Holdings LLC and Hancock Natural Resources Group Inc., have committed to invest up to an aggregate of $320 million in equity capital in a joint venture called Enviva Wilmington Holdings LLC. The joint venture company plans to construct a pellet plant in Sampson County, North Carolina, and a marine export terminal at the Port of Wilmington, North Carolina. Construction on both facilities is expected to begin in December. A statement released by Enviva notes pellets produced at the Sampson County plant will be exported through the Wilmington terminal under long-term contracts with European power generators.

Information released by the companies also indicates the joint venture may construct other pellet plants and marine terminals in the southeastern U.S. in the future.

In September, North Carolina Gov. Pat McCrory and North Carolina Commerce Secretary Sharon Decker announced that Enviva planned to develop two pellets plants, one located in Sampson County and one located in Richmond County. Biomass Magazine previously reported that Enviva is also pursuing the development of a third pellet plant, which  documents published by the North Carolina State Ports Authority earlier this year indicate could be located in Laurens County, South Carolina. Enviva also previously confirmed that all three proposed facilities would export pellets through a proposed terminal at the Port of Wilmington.

 Documents published by the North Carolina State Ports Authority in March specify the port has entered into a land lease and operations agreement with Enviva Holdings LP to construct a pellet export facility capable of exporting 2 million tons of wood pellets annually. The project would include the construction of two concrete storage domes with a capacity of 45,000 metric tons each. A truck and rail unloading station, conveyor systems, and a ship loading system would also be developed as a part of the facility.

Enviva currently operates five pellet plants, including those in Wiggins Mississippi; Amory, Mississippi; Ahoskie, North Carolina; Northampton, North Carolina; and Southampton, Virginia. In addition to its three proposed pellet projects, the company has also announced plans to expand its presence in the pellet industry through an acquisition. Earlier this year, Enviva Development Holdings announced an agreement to acquire Green Circle Energy Inc. Green Circle owns and operates a 650,000-ton-per-year wood pellet plant in Cottondale, Florida. The facility, which began operations in 2008, exports product from the Port of Panama City, Florida.

In July 2013, Green Circle announced plans to develop a 500,000-ton-per-year wood pellet facility in Georgia County, Mississippi. Morton Neraas, president and CEO of Green Circle, recently told Biomass Magazine the proposed project currently awaiting the outcome of further clarification of U.K. and European Union regulations. It is also on hold pending the conclusion of the Enviva acquisition and is dependent on Enviva’s development plans and timing. 

In October, Enviva Partners LP filed a registration statement with the U.S. Securities and Exchange Commission for a proposed $100 million initial public offering (IPO). In its S-1 form, Enviva Partners referenced the proposed Sampson County and Wilmington projects, noting that Enviva Holdings would give Enviva Partners right of first offer to acquire the facilities. In that document, Enviva also cited a 500,000 ton per year production capacity for the proposed pellet plant.