Friday November 28, 2014


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Shipments should begin from Northgate terminal this year

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Construction is ongoing on the Ceres Global Ag Corp's Northgate Commodity Logistics Hub in southeast Saskatchewan.

Shipments from the Ceres Global Ag Corp's Northgate project should begin later this year, according to president and CEO Michael Detlefsen.

“We should be moving grain in the early to mid fall,” said Detlefsen.

The Northgate Commodity Logistics Hub is a $90 million grain, oil and oilfield supplies site being developed in conjunction with Riverland Ag, and several potential energy partners, that is connected to the BNSF Railway. It is to offer Canadian farmers and oil producers a point-of-entry location into the United States.

They are “well along” in what Detlefsen termed as the horizontal build phase, which includes site preparation. The majority of the grading is now complete; it should be finished in August. The railroad track is being laid.

“We did have the 1,150-odd metres of track placed in last December, and we're now extending north into the loop track and the ladder track,” said Detlefsen. “All of that should be completed by early October.”

As for the vertical build, they have commissioned a temporary grain transload site, which should be finished this fall. A permanent grain elevator won't be completed until harvest of next year.

The terminal will initially accommodate cereal grains like wheat and rye. They're still discussing if they can ship canola in the early stages. They might also be able to do some hay.

“As we get the main grain elevator up and running, we would migrate to be able to do canola and other grains,” said Detlefsen.

They should be able to handle 24-car or 48-car trains initially, and then 120-car trains next summer.

The board is still reflecting on options for natural gas liquids (NGL) and oil, he said. They would be transloaded in separate areas on the hub site.

“If they can make some decisions in the next month, I think we can be in a position to be moving some NGLs and possibly some oil by the end of the year,” said Detlefsen.

Oil and NGLs offer good opportunities, he said.

The hub will have 10 to 15 employees once Phase 1 is finished. They are in the process of interviewing potential staff members. They could have anywhere from 35 to 50 employees once the project is completed.

Legal proceedings launched by The Scoular Company haven't delayed the Northgate project, he said. Scoular is seeking injunctive relief and unspecified damages related to the development and construction of the grain facility.

Ceres announced earlier this year it would end its arrangement with Scoular, and it would use its subsidiary, Riverland Ag, in the design and development of the project.

“The decision to go to Riverland as opposed to Scoular has obviously created a bit of a time lag, because Scoular was much farther along in terms of plans and things in place to develop the project,” said Detlefsen. “They could have started the project in February.

“Moving over to Riverland, they had to play catch-up, and I think they're almost caught up, but for example, with the main grain elevator, they wouldn't be able to realistically start that until September.”

The wet weather in June caused some delays, he said, but the site has good drainage, and crews are back on schedule.

Ceres has also secured a $20 million loan with Macquarie Financial that closed last month, as part of their plan to explore a full range of financing alternatives to fund the hub.

The money is being used to fund the project in the interim, and they're looking for additional debt and equity financing. Ceres will be raising that money over the next two to four months, he said.

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