A Terrace-based pellet plant may soon become a reality as Skeena Sawmills moves forward on its plans to begin construction this summer.
The mill is reserving its official announcement on the estimated $20-million pellet plant until construction starts, but operations vice-president Roger Keery has confirmed the project is going ahead.
“All the major equipment is ordered,” Keery said, estimating that the company has already spent roughly $2 million on permits and equipment deposits.
The pellet plant will be built inside the large blue warehouse on the west side of Skeena Sawmills.
Construction is expected to start this summer, with the equipment arriving in June or July. Keery hopes to have it up and running by the end of this fall.
Terrace has had a long history of false starts around pellet plants in the past 10 years, with about six attempts in partnership with the Terrace mill.
“No one has ever been in doubt that there needed to be one,” said Keery.
“It’s just, how do you get to it?”
The pellet business is tough and there’s not a lot of money in it, he said, adding that it can draw a reasonable return if it’s managed well.
But it’s not the economics that is driving the Skeena Sawmills project forward.
“We’re building the pellet plant because it’s critical to our business,” Keery said. “We currently cannot operate our mill to its capacity because we haven’t got anywhere to dispose of the (waste) material we produce.”
Keery says about 30 per cent of harvested wood is unusable for lumber products, and until now Skeena Sawmills has been loading it into the Kitsumkalum landfill.
“But it’s now full,” said Keery of the landfill, “so we can’t do that anymore.”
The sawmill is now stockpiling its waste wood in anticipation of what’s hoped to be the pellet plant’s fall startup.
“There’s still some uncertainty (about the timeline),” said Keery.
Roc Holdings Ltd, the Vancouver-based investment company that owns Skeena Sawmills, is starting up a separate company called Skeena Biofuels to build and operate the pellet plant, but Keery says they are considering potential partnerships.
The plant will produce an estimated 75,000 tonnes of pellets per year, and although buyers have not yet been identified Keery said there’s been a lot of interest from markets in China, Japan and Korea.
So far three people, Gary Johnston, Nathan Bond, and Randy Coombes are employed to get the Skeena Biofuels plant up and running.
Once the plant is operational it will provide 12 to 15 jobs, probably two in management positions and 10-13 for operations and maintenance.
“We’ve put a lot of effort into designing our plant to be a state of the art pellet plant in terms of its efficiency, its environmental impact, and its impact on the neighbourhood in terms of noise,” said Keery.
The belt dryer, as an example, will use natural gas instead of wood fuel to dry the pellets at a lower temperature, minimizing wood exhaust.
The complete line of equipment will come from Prodesa, a Spain-based pellet plant and biomass equipment manufacturing company.