Pinnacle Renewable Holdings entered into a limited partnership agreement with Tolko Industries Ltd. to build a new industrial wood pellet production facility in High Level, Alberta, Canada.
Initial wood pellet production at the facility is expected to commence in the fourth quarter of 2020. The capital cost of the Facility is expected to be approximately $54 million, with 50% funded by Pinnacle and 50% by Tolko.
According to the announcement, under the terms of thepartnership, Pinnacle will operate the Facility and manage all aspects of customer relations, marketing, sales, and logistics. At the same time, Tolko will supply both heat energy and fibre to the Facility under long-term supply agreements.
The facility is expected to further diversify the company’s fibre supply using high-quality wood fibre sourced primarily from Tolko’s existing sawmill in High Level. It is also expected to have a run-rate production capacity of 170,000 to 200,000 metric tons per annum.
Annual production volumes from the facility will be sold through Pinnacle’s contracted backlog of long-term, take-or-pay off-take contracts.
Under the terms of the partnership, Pinnacle and Tolko will each own a 50 percent interest in the facility.
The company is an industrial wood pellet manufacturer and distributor and the third largest producer in the world. It produces sustainable fuel for renewable electricity generation in the form of industrial wood pellets. This fuel is used by large-scale thermal power generators as a greener alternative to produce reliable baseload renewable power. The company operates seven industrial wood pellet production facilities in western Canada and one in Alabama, owns a port terminal in Prince Rupert, B.C. and is currently constructing a new production facility in Smithers, B.C.
The company is a leading manufacturer of a wide range of forest products for customers around the world. The company offers lumber, OSB, plywood and veneer, and kraft paper in its product portfolio, as well as related services. Its operations located throughout Western Canada.