Duncan Davies, Pinnacle CEO, comments, “The combination of Pinnacle and Drax will create a global leader in sustainable biomass with the vision, technical expertise and financial strength to help meet the growing demand for renewable energy products around the world.”
Will Gardiner, CEO of Drax, remarks, “I am excited about this deal which will reinforce Drax’s position as the world’s leading sustainable biomass generation and supply business, delivering against our strategy to increase self-supply, reduce our biomass production cost and create a long-term future for sustainable biomass.”
In addition to Pinnacle and Drax shareholder approvals, the transaction is subject to other closing conditions, including governmental and regulatory approvals as well as the approval of the Supreme Court of British Columbia. The transaction is expected to close in the second or third quarter of 2021.
Pinnacle is the second largest producer of industrial wood pellets in the world. The company operates nine production facilities in Western Canada and one in Aliceville, Ala., with one additional facility nearing startup in Demopolis, Ala. The company also owns a port terminal in Prince Rupert, BC. Pinnacle has entered into long-term, take-or-pay contracts with utilities in the U.K., Europe and Asia that represent an average of 99% of its production capacity through 2026.
Drax notes the transaction more than doubles its biomass production capacity, significantly reduces its cost of biomass production and adds a major biomass supply business underpinned by long-term contracts with high-quality Asian and European counterparties. Specifically it adds 2.9 million tonnes of biomass production capacity. Pinnacle’s existing joint venture minority partnerships carry over to Drax in the transaction.
Through scale, operational efficiency and low-cost fiber sourcing, Pinnacle reportedly currently produces biomass at a lower cost than Drax. This reflects the use of high levels of low-cost sawmill residues. Seven of Pinnacle’s sites are in British Columbia (1.6 million tonne nameplate capacity) and two are in Alberta (0.6 million tonne nameplate capacity). All of these sites have rail lines to ports at either Prince Rupert or Vancouver, both accessing the Pacific Ocean, providing routes to Asian and European markets. Pinnacle also operates a U.S. hub at Aliceville, Ala. (0.3 million tonne nameplate capacity) and is developing a second site in Demopolis, Ala. (0.4 million tonne nameplate capacity), which Pinnacle expects to commission in 2021.
Pinnacle’s U.S. sites are close to Drax’s existing operations in the Southeastern U.S. and will utilize river barges to access the Port of Mobile and barge-to-ship loading, reducing fixed port storage costs.
USNR announced in early September, they have sold the DynaStar Maintenance Management Software to DrekiTek Software Solutions Ltd., and looks forward to a long-term relationship with DrekiTek Software Solutions as it continues the development and support of the DynaStar system…
Following a pandemic-induced cancellation in 2020, the biennial Timber Processing & Energy Expo returns September 28-30 to the Portland Exposition Center in Portland, Ore. Hatton-Brown Expositions, an affiliate of Timber Processing magazine, has hosted the event since 2010…
Timber Processing & Energy Expo, which will be held September 28-30 at the Portland Exposition Center in Portland, Ore., will include two conferences: Sawmill Productivity & Efficiency; and From Forest to Frame: Mass Timber Developments.
The seventh TP&EE will spotlight 150 machinery and technology exhibiting companies catering to the lumber and engineered wood products sectors. Held every other year, it was cancelled due to the pandemic in 2020…
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