Zilkha closes on last land purchase for Arkansas pellet plant

By Katie Fletcher | January 27, 2015

Zilkha Biomass Energy announced this month a close on the purchase of the last parcel of land to be acquired for its proposed 450,000 metric-ton-per-year pellet plant in Monticello, Arkansas. The 80.99 acres were purchased for $80,500 from the University of Arkansas at Monticello.

This land purchase was made in addition to three other lots situated within the Monticello Economic Development Commission Industrial Park, totaling approximately 110 acres for the total area of the proposed project’s property.

The UAM land purchase was made months after the other transactions took place due to terms in the purchase agreement. ZBE and UAM arranged for the final transaction to take place after the university harvested and sold the standing timber on the land, said Stephanie Mire, project manager with ZBE. Additionally, the parties arranged for the UAM Heavy Equipment School to perform some clearing and preliminary site work activity, which Mire said benefitted both parties.

This announcement follows ZBE’s declaration to build, which Biomass Magazine reported on in July. The proposed plant will produce Zilkha’s black pellets for anticipated export to a European customer. The total capital cost of the project is estimated to come in around $90 million. 

The pellets will be produced from locally-sourced feedstock, most of which is gathered from sustainably managed sources within a 50-mile radius of the plant, Mire said. This is one of the reasons the location was chosen for the plant. “We chose that location because of the conditions of the wood basket and support from local groups,” Mire said. “Arkansas has a very large wood basket that can be sustainably managed, and we received a lot of support from the economic development commissions of Arkansas and Monticello.”

Construction of the pellet plant is anticipated to commence around the end of quarter two and beginning of quarter three this year. Production is expected to begin quarter four of 2016. “Locally our plant in Monticello will promote healthy management practices, and the output of this plant could reduce GHG emissions from coal-fired power generators by roughly 77 percent,” Mire said.

The plant will also positively impact the local area by bringing in a direct 52 jobs, in addition to indirect job growth.

This plant joins a few others. The company’s first plant was the conversion of small, white pellets in Crockett, Texas. This plant has an annual production capacity of 40,000 metric tons, and has transitioned into a demonstration and research plant, according to ZBE. A second plant is currently commissioning in Selma, Alabama, with the production capacity of 275,000 metric tons per year, and a long-term contract for the output at the plant.