Port inks lease with transporter

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Bill Feig /
Advocate staff file photo by BILL FEIG -- The Port of Baton Rouge plans to lease property to a tenant for a wood pellet transport operations.

The Port of Greater Baton Rouge has approved a lease with a company that will build a $30 million wood pellet transfer operation at the port’s Port Allen facility.

Baton Rouge Transit, a subsidiary of the United Kingdom-based multinational Drax Group, will build a facility consisting of three domes with a capacity of 40,000 short tons each and rail and truck unloading conveyors on 10 acres of port property.

The wood pellets, which will be manufactured in plants in Morehouse Parish and in Mississippi, will come into the port facility to be shipped out to be used as fuel in Europe.

The lease, which has three five-year options, takes effect in January, and the facility should be operational in early 2014, Port Director Jay Hardman said.

The lease terms include base rent of $6,500 per acre and additional revenue based on the amount of pellets that run through the facility.

Initial revenue for the port from the deal is projected to be $672,000 in 2014 and about $1.6 million in 2015. In that year, for example, $1.1 million would come from throughput. The operation is projected to bring $274,500 in dockage (30 Panamax vessels) and $90,000 in rail revenue (9,000 rail cars).

The port had to part ways with another planned wood pellet operation, Point Bio Energy, earlier this year after that company’s efforts to line up financing and other contracts took longer than the port expected. Point Bio ended up leasing some property near the port.

In other business, the port commission voted to sever its newly established lease with the sand drying operation GNS Frac, which never got off the ground due to low natural gas prices and the loss of its major financial backer.

The $10 million facility would have prepared sand to barge out for use by oil and gas companies drilling in domestic markets.