Drax acquires stake in Alabama Pellets

North Yorkshire-based power company Drax Group announced it agreed to acquire a 20% minority interest in Alabama Pellets, LLC — a joint venture which owns the Demopolis and Aliceville pellet plants — from The Westervelt Company for $29.7 million.

“The acquisition will increase the group’s interest in Alabama Pellets to 90% and provide Drax with economic control over a further c.130,000 tonnes of biomass production capacity per annum,” said Drax. 

The acquisition of Pinnacle Renewable Energy Inc. included a change of control provision over Alabama Pellets.

“Drax has been in discussions with Alabama Pellets joint venture partners regarding future working relationships, including their minority interests.

“The remaining joint venture partner, Two Rivers Lumber Co., LLC, holds a 10% economic interest.

Demopolis and Aliceville are located in Alabama, in the US southeast, close to the group’s existing US operations and have a combined nameplate production capacity of 660,000 tonnes per annum.

“Aliceville was commissioned in 2018 and Demopolis is expected to be commissioned in 2021.

Drax Group has 13 operational pellet plants (including Aliceville) plus satellite plant developments and Demopolis, with total nameplate production capacity of 4.9 million tonnes per annum once commissioned.

“These plants are geographically diverse and sited in three major fibre baskets (British Columbia, Alberta and the US southeast) with access to four deep water ports providing routes to markets in Asia, Europe and the UK.”