Process flow sheets were developed for the thermal treatment of southern pine wood chips at four temperatures (150, 180, 230, and 270 degrees C) and two different scales (20 and 100 ton/hour). The larger capacity processes had as their primary heat source hot gas assumed to be available in quantity from an adjacent biorefinery. Mass and energy balances for these flow sheets were developed using Aspen Plus process simulation software. The hot gas demands in the larger processes, up to 1.9 million lb/hour, were of questionable feasibility because of the volume to be moved. This heat was of low utility because the torrefaction process, especially at higher temperatures, is a net heat producer if the organic byproduct gases are burned. A thermal treatment flow sheet using wood chips dried in the biorefinery to 10% moisture content (rather than 30% for green chips) with transfer of high temperature steam from the thermal treatment depot to the biorefinery was also examined. The equipment size information from all of these cases was used in several different equipment cost estimating methods to estimate the major equipment costs for each process. From these, factored estimates of other plant costs were determined, leading to estimates (� 30% accuracy) of total plant capital cost. The 20 ton/hour processes were close to 25 million dollars except for the 230 degrees C case using dried wood chips which was only 15 million dollars because of its small furnace. The larger processes ranged from 64-120 million dollars. From these capital costs and projections of several categories of operating costs, the processing cost of thermally treated pine chips was found to be $28-33 per ton depending on the degree of treatment and without any credits for steam generation. If the excess energy output of the two 20 ton/hr depot cases at 270 degrees C can be sold for $10 per million BTU, the net processing cost dropped to $13/ton product starting with green wood chips or only $3 per ton if using dried chips from the biorefinery. Including a 12% return on invested capital raised all of the operating cost results by about $20/ton.