Romanian producer signs off take agreement with European utility

London, 15 October (Argus) - Integrated renewable energy firm AGI Capital Investment SRL has signed a long-term off take agreement with a major European utility to supply industrial wood pellets from Romania.

The deal, which will see 140,000 tonnes a year exported from the Black Sea, will see the first shipment discharge in the first quarter of 2013. Production at the plant in Nehoiu, Buzau County, is set to commence next month before reaching full capacity by January.

The company is unable to disclose the name of the European utility or length of the contract but told Argus they will be the largest exporter of industrial wood pellets from the Black Sea basin.

“We have two lines which will produce 140,000 t/yr, which will start in three weeks,” AGI Capital commercial director Maciek Stefanski told Argus. “We concluded a long term off take agreement to a European generator, which will see shipments from the Port of Constanta starting early next year and see us become the largest Black Sea pellet exporter.”

American owned, AGI Capital is an integrated renewable energy firm, forestry and cross commodity trading company with over 30 years presence and experience in Romanian forestry. The firm owns and operates a 13ha wood processing facility, Nehoiu Forestry Complex, which has been in operation since 1907, and is embarking on the production of FSC certified industrial wood pellets and high grade hardwood timber boards from natural growth forests in the sub-Carpathian region of Romania.

The new wood pellet plant will be the largest in Romania and the company has future plans to produce more from the areas’s untapped resources. “In Romania the vast majority of the forest is owned by the state large institutions and private funds who hold annual auctions for the harvesting rights,” Stefanski said. “We’re in a fortunate position as we have limited competition within our catchment area and with the fibre availability at our disposal we have the opportunity to increase production, which we will explore over the next twelve months."

The company, with the assistance of UK consultancy firm Envirosense, secured FSC certification for the fibre and the mill following a recent audit by UK certification firm BM Trada. AGI Capital is also in the process of developing two further projects in Romania, a 20MWe CHP plant and a 45MW solar project in the final stage of permitting

“Romania has an attractive and stable incentive scheme for renewable growth,” Stefanski added. “We have a 45MW solar project near completion of permitting and we’ve just completed the feasibility study on the 20MW CHP plant, which will be fuelled by local energy crop plantations.

“Both the pellet production plant and CHP plant is also helping to regenerate the local community. The demise of the sawmill under previous ownership had a detrimental effect on the town of Nehoiu but we’ve helped rejuvenate the economy and been warmly welcomed by the community.”

AGI Capital will use handysize vessels and expect to deliver 10-12 shipments a year of 15,000/t under the long term arrangement.

Oct 15