RFP Wood pellets Ltd (RFP WP), part of RFP Group, entered into a long-term agreement with the international energy and gas company Engie Energy Management SCRL (Engie EM) for the supply of industrial pellets to Japan. This is the first long-term transaction in the field of biomass trade between Russia and Japan.
Under the agreement RFP WP will annually supply up to 90,000 tons of pellets to Japan. The contract is 12 years long, starting from 2020 with the extension option until 2036. The pellets are aimed for power generation segment in Japan.
RFP Wood Pellets is a joint venture between Japanese investment fund Prospect Co. Ltd. and Russian timber industry holding RFP Group. RFP owns 51% in RFP WP. The project has been implemented since 2017 as part of the Priority Investment Project « Far Eastern Advanced Wood Processing Center » in Amursk, Khabarovsk region. Start of production is scheduled for 2H 2020.
As wood waste from existing lumber and veneer plants will be used as raw material for pellets, the Far Eastern Advanced Wood Processing Center will become zero-woodwaste production with the project launch.
As demand for industrial pellets in Japan is expected to grow further, RFP plans to increase capacity from the current 100,000 tons to 135,000 tons by 2022. Additional volume is also planned to be sold in the markets of Japan and South Korea.
“During the project execution, we managed to implement several new approaches to work: launch of a new product, attracting financing from a Japanese investment fund, structuring a joint venture and long-term off-take agreement with specified commercial terms for he whole contract period. Accumulated experience allows us to further grow biomass business within the Group”, said Roman Romanovsky, the General Director of RFP Wood Pellets Ltd. and the Deputy CEO, Business Development of RFP Group.
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RFP Group (Russia Forest Products Group) is the largest forest industry holding of the Russian Far East, ranks 4th in Russia for annual allowable cut. RFP holds forest lease rights for 4.5 million hectares of timberlands with annual allowable cut of 4.5 million cubic metres. RFP Group operates one of the largest wood processing clusters which include veneer, sawnwood and pellet plants. Further information can be found on RFP official web-site: www.rfpgroup.ru
Prospect Company Limited (TSE: 3528) is a Tokyo Stock Exchange listed company with a wide range of business operations including residential real estate development and renewable energy business including solar power generation and electricity sale. The Company currently has 150 million USD in renewable energy projects in operation and under development. Further information can be found on Prospect Co. Ltd. official web-site: www.prospectjapan.co.jp
ENGIE S.A. is a large international energy and gas company headquartered in Paris with 170 thousand employees and 60 billion euros of revenue. The company operates in the fields of energy transition, electricity generation and distribution, natural gas, nuclear, renewable energy and Petroleum. The company main shareholder is French government. Further information can be found at: www.engie.com
