The Virginia Port Authority has approved a 20-year lease with its first tenant at Portsmouth Marine Terminal, ecoFUELS Pellet Storage LLC, a Virginia-based company that exports wood pellets to Europe.

The operation will occupy roughly 15 acres at PMT, which has been idle since container operations were moved to APM Terminals in January 2011. The facility will service export operations for pellets being shipped into the growing European biomass market. Pellets will arrive at the facility by both truck and train.

“ecoFUELS will be making a significant capital investment at PMT to build a pair of domes that will house the pellets and stage them for export,” said Rodney Oliver, interim executive director of the VPA.

“In addition, one of our objectives is to diversify the business within the Hampton Roads Harbor and with the ecoFUELS announcement, we’ve met that goal.”

The facility will be designed to handle a minimum throughput of 1.2 million tons of pellets.

If that amount is reached it could result in further expansion, company officials said.

Port officials said Wednesday the deal is worth about $420,000 a year to the commonwealth and that the lease leaves about 100 acres available at the terminal.

“We are very pleased by the confidence the Port of Virginia has in ecoFUELS by selecting us to lead this effort” said Randy Gibbs of ecoFUELS. “PMT is one of the most attractive locations for pellet storage on the U.S. East Coast and provides tremendous advantages for shipment of pellets into Europe.”

“The wood pellet industry has tremendous export growth potential” said Terry McAuliffe of ecoFUELS. “We considered a number of locations, and PMT is by far and away the very best.”

ecoFUELS partner Peter O’Keefe said Wednesday it was too early to say how many jobs the project would generate.

“As we get further along in the development, we will have other announcements to make,” he said.