FAME facing key decision on future of $35M mill in Millinocket

This rendering depicts the approximate design of what a torrefied wood pellet plant  would look like.
Image courtesy of Thermogen Industries
This rendering depicts the approximate design of what a torrefied wood pellet plant would look like.
By Nick Sambides Jr., BDN Staff
Posted Sept. 21, 2013, at 6:05 p.m.

MILLINOCKET, Maine — The state’s finance agency will meet later this month to discuss an application for a $30 million bond for a facility that town leaders hope will revitalize the forest products industries from the Katahdin region to Searsport.

Several Katahdin region leaders said they will attend a Finance Authority of Maine hearing in Augusta on Sept. 30 in which FAME officials will review Thermogen Industries’ application for the loan guarantee, Town Manager Peggy Daigle said.

Thermogen hopes to install a $35 million machine at the Katahdin Avenue industrial site that will employ 30 to 35 workers directly, and as many as six times that indirectly, making torrefied wood. European electrical utilities use torrefied pellets, a type of wood pellet that burns 30 times hotter than regular pellets, as an alternative energy, cleaner-burning coal substitute.

The torrefied wood facility would be New England’s first, company officials have said.

Town Councilor Michael Madore plans to be among those who speak. The Katahdin region could use an infusion of the good news created by more than 100 jobs, he said Saturday.

“It is a logical fit,” Madore said of Thermogen and the region. “What is the asset that we have the most of? Wood. We have the rail system and a lot of things going for us that they need.”

Thermogen is a subsidiary of Cate Street Capital, which owns the East Millinocket paper mill and the industrial site. The paper mill is a key component of the torrefied wood plans because torrefaction requires only the wood wastes of trees already harvested for paper manufacture, officials have said.

Developing a profitable use for wood wastes, officials have said, could significantly increase the amount of wood harvested from the Golden Road while lowering the paper mill’s harvesting costs, increasing the mill’s competitiveness.

A successful torrefied wood mill could also create opportunity for more traditional wood pellet manufacture and other forest products industry outlets that the region lacks.

Cate Street spokesman Scott Tranchemontagne has said the first wood machine is one of five slated for Millinocket. Two or three more will be built at an $80 million facility in Eastport over the next several years, with the first Eastport machine coming online sometime in 2015.

The first machine in Millinocket will directly employ 30 to 35 workers and create or sustain 80 to 100 jobs indirectly, he said. Each machine after will employ 20 to 25 directly with 80 to 100 jobs indirectly benefiting. Prep work for the first torrefied wood machine began at the site in November, two months after the project was issued its final permits. The demolition of several buildings, the first step toward creating an accompanying industrial park, began in March.

Thermogen is the only major investor that councilors know of with significant economic development plans for the region, Daigle and Madore said.

“The people in the town of Millinocket need some positive news. They have had nothing but bad news for the last few years,” Daigle said. “People need something to retain hope and to realize that there is a future here. Thermogen means everything in terms of showing people that there is a future here and that we can pick ourselves up by our boot straps.”

“It is about creating jobs that fit the skill sets here,” Daigle said.

But Cate Street’s plans for Thermogen are years overdue. Company officials had hoped to have the first machine operating a year ago. Incomplete financing, a state snafu that delayed by several months the company’s receiving alternative energy tax credits, and struggles with the paper mill’s profitability delayed the project, company officials have said.

Several East Millinocket selectmen also plan to attend the meeting, Daigle said. It was unclear whether Medway and Woodville town officials would come to the meeting.

Company officials are preparing for the meeting, Tranchemontagne said last week. The FAME financing effort is a key component to their plans.

Created by the Legislature, FAME is an independent state agency that develops and administers programs related to the financing of higher education and business in Maine, according to the state website, maine.gov.

FAME began reviewing the project in June.

http://bangordailynews.com/2013/09/21/news/penobscot/fame-facing-key-decision-on-future-of-35m-mill/ printed on July 23, 2014