Belgium's Electrabel Signs $52 Mil Australian Wood Pellet Deal

Plantation Energy Australia has signed a three-year, A$70 million ($52 million, Eur39 million) deal to supply GDF Suez subsidiary Electrabel of Belgium with densified biomass fuel pellets

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Belgium's Electrabel Signs $52 Mil Australian Wood Pellet Deal

London (Platts)--6 May 2009

Plantation Energy Australia has signed a three-year, A$70 million ($52 million, Eur39 million) deal to supply GDF Suez subsidiary Electrabel of Belgium with densified biomass fuel pellets, the Australian company said Wednesday.

No tonnage was given in the deal. "Quantity is confidential information, which we cannot give," Plantation Energy's Roeland Reesinck told Platts Wednesday.

He noted, however, that the two parties would have negotiated a deal "that does not deviate spectacularly from the industrial wood pellet index quoted by [Dutch energy exchange] Endex."

On May 4, the index for pellets CIF Rotterdam for Calendar 2010 quoted a settlement price of Eur135.95/metric ton. Such a price would translate into over 286,000 mt of DBF pellets under a Eur39 million supply deal.

DBF pellets are used extensively in Europe, where they are co-fired with coal in coal-fired power stations. Demand for pellets exceeded 8 million mt in 2008 and is expected to top 16 million mt by 2014, Plantation Energy said.

"The agreement between Plantation Energy and Electrabel is the first of its kind in Australia that will see Plantation Energy manufacture and export clean renewable energy in the form of DBF pellets made from non-commercial plantation forest residues," the company said.

Initial exports will be shipped from Albany, Western Australia, where the first of several planned pellet manufacturing facilities has been built.

"The first plant, which is opening up next month, can produce 250,000 mt per annum, and there will be a second and a third plant, both of similar size, opening up next year," Reesinck said.

These manufacturing plants are in the Green Triangle region of Victoria and South Australia, with product to be exported via the Port of Portland in Victoria.

"This agreement strongly supports Electrabel's continuous efforts to replace fossil fuels with renewable sources and helps us to retain market leadership in this segment," said Rudy Willemse, Biofuel Purchase Manager of Electrabel. "The extremely efficient logistics of the Plantation Energy Albany plant fully preserve the CO2-neutral character of their product."

Additional Information

Web Site: http://www.platts.com/Electric%20Power/News/8538320.xml?src=Electric%20Powerrssheadlines1

Category: Forestry>Wood Pellets

Region: Worldwide

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