In this study, energy and exergy analysis are studied to examine and understand the performance of the heating unit in Nag Hammadi fiber board Company (NFB) with a capacity of 22 MW, utilizing natural gas and biofuel together where the combustion chamber is designed to burn natural gas and wood dust at the same time to decrease the operating cost of the heating unit. The main purpose of heating unit is to burn natural gas and biofuel to supply the manufacturing processes in fiber board production line by hot flue gases for dryer unit and saturated steam for the digestion unit . the heating unit consist of combustion chamber ,heat exchanger and steam generator .There is no heat transfer inside the combustion chamber except heat losses through the wall of the combustion chamber. The energy and exergy efficiencies for combustion chamber are found to be 74 % and 42 %, respectively, for heat exchanger are found to be 85 % and 51 %, respectively, for steam generator are found to be 78 % and 30 %, respectively and for heating unit totally are found to be 64 % and 31 %, respectively. This study is carried out to identify and quantify the energy and exergy losses in the heating unit components.