Pinnacle announces new off-take contracts in Japan and South Korea
Canada's largest and the world's second-largest wood pellet producer, Pinnacle Renewable Energy Inc. (Pinnacle), has announced that it has entered into two new long-term, take-or-pay off-take contracts with customers in Japan and South Korea, both being accelerated growth markets for Pinnacle. The new deals increase the value of the contracted backlog to CA$6.9 billion and add over 200 000 tonnes per annum of pellets to be supplied from 2022.
According to a statement, the contract in Japan is an extension of an existing contract with Mitsubishi Corporation (Mitsubishi), a global integrated business enterprise in Japan. Under the terms of the contract, Pinnacle will supply 110 000 to 120 000 tonnes per annum (tpa) of industrial wood pellets to Mitsubishi beginning in 2021.
The contract in South Korea is with GS Global Corporation (GS), a large diversified conglomerate in South Korea and the first dedicated biomass independent power producer (IPP) in that country. Under the terms of the contract, Pinnacle will supply 100 000 tpa of industrial wood pellets to GS beginning in 2022.
These new contracts represent the strengthening of our relationship with Mitsubishi and the expansion of our business in the Asian market, with the relationship with GS marking our third contract in South Korea. With the growth of our contracted back-log and diversification of our counterparties, we are continuing to evaluate and develop further opportunities to add incremental production capacity, supported by our recently expanded credit facility, said Rob McCurdy, CEO of Pinnacle.
Japan is a supportive market for renewable energy, targeting 3.7 percent to 4.6 percent from biomass or 20 million tpa in pellet equivalent terms, providing Pinnacle with a compelling opportunity to continue growing in this market.
Like Japan, South Korea has also set specific targets for renewable power generation, seeking to achieve 10 percent from renewables by 2023.