The Ceres Global Agriculture Corporation announced plans February 5 to develop a commodity logistics hub in Northgate that will be connected to BNSF Railway’s United States rail network.
Ceres has purchased 1,500 acres of land to construct a new commodity logistics hub, with two rail loops that will each be capable of handling unit trains of up to 120 railcars.
One loop will be dedicated to a grain handling and shipping facility, and the other to transloading and shipping oil. In addition, a logistics centre will unload imported equipment and materials for Saskatchewan’s resource economy.
The connection to BNSF’s network will give shippers direct access to customers in 28 states, plus Pacific and Gulf ports, and Mexico, along BNSF’s 32,000 mile network. It will include over 45 crude-by-rail destinations.
Access to many other strategic interior locations and Atlantic ports are available through BNSF’s rail connections.
Construction is projected to commence in the spring, but that will be subject to the receipt of all necessary permits and approvals, and the finalization of agreements with project partners. Initial grain and oil shipments are expected to start later in 2013.
The total capital cost is budgeted to be $90 million. The facility will be built over three years, and has been designed ultimately to handle up to 40 million bushels of grain annually and 70,000 barrels of oil per day. More than 100 construction jobs will be created, and about 30 people will be employed once the facility is operational.
U.S.-based agricultural marketing firm Scoular Company is partnering with Ceres on the project. Scoular will fund, own and operate the grain handling facility.
Ceres’ grain subsidiary, Riverland Ag, will be a major customer of the grain facility, and will work closely with Scoular on the procurement of certain grains.
“The Northgate hub is good news for Canada’s economy and particularly good for Saskatchewan and Western Canada,” said Ceres president Michael Detlefsen. “It will help ease the bottleneck of getting commodities – especially grain and oil – out of Saskatchewan and will provide a new and competitive option for shippers and exporters.
“Ceres is delighted to have Scoular as a partner on this project, and to be introducing a new, major buyer of grain to the Canadian market.”
“The Saskatchewan farmer is poised for much greater participation in an expanding and highly competitive global market,” said Scoular chief operating officer Bob Ludington. “This important project gives high quality Canadian wheat direct line access to U.S. and Mexican flour millers, and will open extensive new markets for Canadian canola.
“The Northgate hub will serve to shrink the distance between Canadian supply and global demand, expanding the marketing options for area producers tremendously.”
The facility will also be very good news for Canadian oil producers looking for new, cost-competitive ways to get Saskatchewan oil to higher priced markets.
Detlefsen said discussions are nearly finished with a number of Canadian energy companies for oil transloading contracts at the Northgate facility.
The facility has been designed to mitigate impacts on the environment. Engineering design work is well advanced, and the project team is working closely with regulatory authorities to secure the necessary permits and approvals.
Through the “Beyond the Border” initiative, Canada and the U.S. have committed to harmonizing customs processes in order to both enhance security and facilitate the efficient cross-border flow of commercial goods.