MILLINOCKET — Maine’s “biggest small town” is slated to become a big provider of renewable energy.

National biofuels company Castlerock Biofuels and the Ensyn Corporation recently selected Millinocket’s former Great Northern Paper Mill as the site of a future facility that will convert logging residue into millions of gallons of a renewable heating oil alternative called bio-oil.

“We have an incredible history of working in forest products, and this is an opportunity to bring that industry back to life here in the Katahdin region — in Millinocket — in a more modern and progressively adaptive way,” said Millinocket Town Manager Peter Jamieson.

Jamieson says the town is an ideal location for a project like this.

“We have direct access to not only an extensive wood supply for raw materials but also Brookfield Power,” he said.

Jamieson also said he expects the project to benefit the town financially.

“This one company alone —when we’re looking at estimations of increased tax revenue and ability to invest further into ourselves — the amount of increased tax revenue expected is comparable to what our entire tax raise is currently from our taxpayers in the community,” said Jamieson. “So, this is a huge deal.”

Community development nonprofit Our Katahdin says the oil will serve large institutional customers across the Northeast. Jamieson said this means major clientele could include hospitals and colleges.

Additionally, Our Katahdin expects the project to create around 150 construction jobs during development, and 80 full-time jobs once the plant is up and running.

According to Our Katahdin, permitting is currently underway and financing is expected to close sometime this year.

Construction is set for six months after funding closes and the facility is expected to be fully operational by 2027.