The Port of Pascagoula has gotten the last funding piece in place for its wood pellet facility.
The $196 million bond bill approved during the legislative session that ended in April includes $10 million that will round out the money needed for the $30 million project. The facility will be built along two terminals on the port’s Bayou Casotte.
Port director Mark McAndrews said work should start on the facility by the end of this year, with construction expected to take about 12 months. The plan, he said, is for the facility to start shipping wood pellets by the end of 2014.
To go with the $10 million in bond money, the port is contributing $15 million. Existing terminal operators are contributing $5 million for the wood pellet facility.
Wood pellets are seen as holding significant economic potential for southeastern Mississippi’s timber industry, which has slowed due to the recession’s hit on new housing starts. The pellets are in high demand overseas for use in heating utilities. A handful of wood pellet facilities have started operation in the Pine Belt region within the last couple years. Gulf Coast Renewable Energy announced earlier this year plans for wood pellet facilities in Copiah and George counties, but will use an Alabama port to ship their products.
That illustrates the problem that has plagued the region’s timber industry, McAndrews said. There is plenty to produce and ship, but no dependably cheap way to do so.
The Port of Pascagoula could potentially serve as a primary way to get those wood pellets to market, McAndrews said.
“We’ve been looking at wood pellets as an opportunity for the port for about four or five years. This particular project has been in the works about 18 months,” he said in an interview this week.
The facility will have a similar look to a grain elevator, and will primarily be served by truck. That could change, McAndrews said, if a project to restore continuous rail service along the East Mississippi border is completed. The Rail Authority of East Mississippi received $1 million bonds to advance pre-construction work to restore 56 miles of track that has been closed since the early 1980s.
If the rail project is completed, it would offer wood pellet manufacturers direct rail access to the port. Currently, the rail runs through Mobile before heading west to Pascagoula. The port chipped in funding for an initial feasibility project. The project is geared toward offering cheap transportation for south Mississippi’s wood pellet industry. The $1 million in bond money will pay for an environmental impact analysis and other pre-construction steps, said Geoffrey Clark, RAEM’s executive director. Clark said if the analysis finds no negative impact, the project be eligible for a low-interest construction loan through the Federal Railroad Administration.
The port currently ships lumber, paper products, petroleum products, newsprint and poultry. Most everything it ships are Mississippi-originated products, McAndrews said.
“We’re going to build this wood pellet facility and we think it will be a great benefit to a lot of people in Mississippi,” he said.