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BDN: Company Confirms Plans For $120 Million Eastport Wood Pellet Plant - Feb. 22, 2013

STORY FROM THE BANGOR DAILY NEWS www.bangordailynews.com

EASTPORT, Maine -- A subsidiary of Cate Street Capital released a statement Friday morning confirming reports that it has plans to construct a multimillion-dollar wood pellet plant near the Port of Eastport marine cargo terminal.

Thermogen Industries indicated in the release that it signed a letter of intent with the port authority's board on Feb. 19. The plan calls for construction of a $120 million plant that can produce between 200,000 and 300,000 tons of torrefied wood pellets each year. Thermogen would lease land from the port authority for 20 years, with the option of extending it another 20 years. Depending on the size of the plant, the facility could create approximately 75 jobs in Eastport and more than 300 additional forestry-related jobs in the Maine woods, the company indicated.

In 2011, Cate Street Capital, based on Portsmouth, N.H., bought the former Great Northern paper mills in Millinocket and East Millinocket and restarted the East Millinocket mill under the Great Northern Paper name.

Last year, Thermogen announced plans to build a similar torrefied wood plant at the Millinocket mill site and has begun site preparation for that facility.

Thermogen said in Friday's statement that it hopes to begin construction in Millinocket later this spring, and by the end of this year to start producing torrefied wood products, reaching commercial operations in early 2014.

The company indicated it hopes to begin construction in Eastport "as early as possible" in 2014.

John Halle, president and CEO of Cate Street, said in Friday's statement that the site in Eastport is "ideal." He said the firm plans to ship pellets out of the adjacent port facility.

"Our clean fuel product, torrefied wood pellets, will be shipped overseas as an alternative fuel for coal-fired power plants that need to reduce harmful emissions," Halle said. "Locating next to the Port of Eastport will greatly reduce our shipping costs while providing new, incremental business for the port."

Thermogen will make pellets with biomass material leftover from wood harvesting operations, the company wrote in the release. The torrefaction process changes the properties of the harvested wood by using microwave technology, not heat, to create a black pellet which burns with a heat output and handling characteristics similar to coal, but much cleaner.

According to the company, it has secured the exclusive rights in North America for proprietary microwave technology to produce its torrefied wood product, which is trademarked as Aurora Black.

Gov. Paul LePage indicated in Friday's statement that he welcomes the news about Thermogen expanding to Eastport.

"I give my full support to this agreement, and I am very encouraged by the large number of quality jobs that will be created," LePage said.

ABOVE STORY FROM THE BANGOR DAILY NEWS  www.bangordailynews.com

Reaction to above story:

In a statement to WQDY NEWS, Former State Senate President Kevin Raye said:

"This announcement of a major investment and new jobs is a monumental moment for Eastport and for Washington County, and a credit to both the visionary leadership of Port Director Chris Gardner and the strong support of Governor LePage's office."

"I'm especially thrilled to see the result of the $4.5 million bond issue I fought to pass in 2009 which made possible the state-of-art conveyor system that attracted Cate Street to Eastport, and to know that the Maine New Markets Tax credit law I sponsored in 2011 may help bring this project to fruition," Raye said.

And U.S. Senator Susan Collins lauded Friday's announcement:

""The announcement of a new Wood Pellet production facility is truly exciting news for Eastport and all of Washington County," Senator Collins said.  "The TIGER grant funding that we fought to secure for Eastport is now attracting new development around the port and creating a positive ripple effect throughout the local economy.  By making sound investments in our infrastructure, we can attract new businesses, create good-paying jobs, and grow our economy, and that is exactly what we are seeing with this new wood pellet factory," Collins said.

In 2010, Senator Collins helped secure a $2 million TIGER grant to develop the port, including the installation of an automated conveyer system for cargo, interior warehouse storage and a five-acre outdoor cargo storage area.   These enhancements allowed the port to diversify into the bulk market, which is cargo that can be weighed, such as wood pellets.