Pinnacle Renewable Energy entered into a limited partnership agreement with Tolko Industries Ltd. to build a new industrial wood pellet production facility in High Level, Alberta, Canada.

Biofuel

Pinnacle Renewable Energy entered into a limited partnership agreement with Tolko Industries

Pinnacle Renewable Energy entered into a limited partnership agreement with Tolko Industries Ltd. ("Tolko") to builda new industrial wood pellet production facility inHigh Level,Alberta, Canada, as the company said in the press release received by Lesprom Network.

The facility further diversifies the company's fibre supply using high-quality wood fibre sourced primarily from Tolko's existing sawmill inHigh Level.

The facility is expected to have a run-rate production capacity of 170,000 to 200,000 metric tons per annum. Annual production volumes from the facility will be sold through Pinnacle's contracted backlog of long-term, take-or-pay off-take contracts.Under the terms of the Partnership, Pinnacle and Tolko will each own a 50% interest in the Facility.

Under the terms of the partnership, Pinnacle will operate the facility and manage all aspects of customer relations, marketing, sales, and logistics.

Tolko will supply both heat energy and fibre to the Facility under long-term supply agreements. The Facility, which will be built on land owned by Tolko, will begin construction in the 2Q 2019.

Initial wood pellet production at the facility is expected to commence in the 4Q 2020.The capital cost of the facility is expected to be approximately $54million, with50% funded by Pinnacle and 50% by Tolko. Pinnacle expects the capital cost to be in line with its capital cost to run-rate EBITDA ratio target range.Pinnacle will fund its portion of the capital costs from draws on its recently expanded credit facilities.

Pinnacle produces sustainable fuel for renewable electricity generation in the form of industrial wood pellets.