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John Hancock Life Insurance in $320m wood pellet JV

The firm is teaming up with Enviva Holdings to develop wood pellet plants to export the biomass fuel to Europe.

John Hancock Life Insurance Company has partnered with developer Enviva Holdings for a wood pellet production joint venture.

The two firms are committing $320 million in equity to Enviva Wilmington Holdings through subsidiaries Hancock Natural Resource Group and Enviva Development Holdings. The new joint venture will build an industrial wood pellet production plant in North Carolina and a marine export terminal at North Carolina’s Port of Wilmington.

Both are expected to start construction later this month, with production from the plant to be exported under long-term contracts to European biomass power generators. The partners don’t rule out building other plants and export terminals across the south-eastern US.

In a regulatory filing last year, Enviva was buoyant on the increasing demand for utility-grade wood pellets, forecasting the market will grow from 9.9 million tons per year in 2013 to 38 million tons per year in 2020. Northern Europe, South Korea and Japan are expected to drive demand, with Enviva adding new production capacity and infrastructure is needed to meet it.

Enviva already owns and operates five wood pellet production plants across the south-eastern US, exporting their product through terminals in Chesapeake, Virginia, and Alabama. It will serve as the joint venture’s operating partner.

Hancock Natural Resource Group has $14 billion of assets under management across its three divisions covering timber, agri, and renewable energy investments.

This story was written by Bruno Alves.