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Biomass Secure Power secures location for Louisiana pellet mill

The board of directors of the Natchitoches Parish Port Commission
approved a notice of intent to lease Biomass Secure Power Inc. 75 acres
of land to build their proposed pellet plant within the confines of the
Port of Natchitoches.

In 2012, BSPI was approached by Louisiana Economic Development to
determine if they were interested in building such a plant in Louisiana,
offering BSPI $26.3 million of estimated benefits to locate the plant
in the state. After considering the business opportunity BSPI decided to
proceed with the development of a facility in Natchitoches Port. To
date, design and basic engineering work for the proposed wood pellet
plant is complete, as well as the now secured lease of land upon which
the plant will be located.

The project will have a significant economic impact on the
Natchitoches Parish and surrounding parishes, resulting in job creation
in the area. “We are going to have approximately 90 employees hired
directly,” Jim Carroll, president and CEO of BSPI said. He added that
there will be close to 500 other jobs connected to the plants
development from “the truckers and everything else in between.”

The initial term of the lease will be for a term of 30 years, with an
option of a 15 year term. As consideration for the proposed lease,
Biomass Power Louisiana LLC will pay the port commission a base rent of
$12,500 per month for the leased premises. This was determined after the
property was appraised to be valued at $160,000.

Phase 1 of the project will be located upon the leased land with the
intention for BSPI to enter into a long term lease with the port and
build out the plant in two phases, each with a total capacity of 1.6
million tons per year of white wood pellets, according to the company

Total construction of this phase is estimated to be around $137
million. The projected gross income of the plant is expected to be
approximately $160 million with earnings before interest, taxes and
amortization of approximately $47 million.

Phase 1 will include three lines capable of producing 340,000 tons of
pellets each annually. Torrefied pellets are planned to be added upon
completion of the first line of phase 2. Torrefied will not be
implemented with phase 1 because of current market demand, but the
capability will be there. These pellets require a long term supply
agreement for both pellets and bio-oil byproduct before capacity is

“You lose about 30 percent of your mass by torrefying, but you
generate off gases and oils that can be used for burning and possibly
selling,” Carroll said. “Right now there is not a market for those off
gases or the biodiesel that comes as a byproduct, so until the market
develops we are not going to put in torrefied.”

Carroll added that down the road if torrefied can be offered at the
same price as white pellets and the byproducts can be sold it is in the
plans to convert to torrefied. The production line for torrefied pellets
will be the same as white pellets at 340,000 tons per year. The company
says, once production levels for these pellets are proven, all lines in
phase 1 may be fitted with equipment that will allow the plant to
produce either regular white pellets of torrefied pellets, depending on
what the customer requires.

As for now securing the site marks progress in moving towards ground
breaking. BSPI expects to execute the lease agreement on or around
August 25, with the port commission board meeting prior to the date to
consider approval for a resolution to enter into the lease.

“We’ll be breaking ground later this year,” Carroll said. “We’re
projecting that we’ll be in full production with phase 1 commissioned
first quarter of 2016.”