Public meetings are underway to gauge the interest in a proposed commodity hub for southeastern Saskatchewan.
A group of farmers from the Weyburn area are proposing a grain, oilseed and pulse handling facility with storage capacity of about 60,000 tonnes, likely to be located near the city on Canadian Pacific Railway’s Soo Line.
Comtrax Logistics Solutions is planning a loop track system of more than 260 cars for grain handling as well as trans-loading of crude oil, aggregate, fertilizer and other products.
The total cost is estimated at $50 to $75 million, depending on the track size and construction phases.
Danny Cugnet, one of the seven proponents, said the farmers involved see opportunities for producer ownership, especially in the grain sector.
“We’re interested in hopefully expanding that into some value-added possibilities as well to these commodities, whether it’s maybe down the road a pasta plant or specialty flour,” he said.
“The biggest part of it is to create a return on investment for this idea and hopefully bring some value back to our farms that we feel like we don’t currently have in the existing market.”
Mark Bratrud, another member of the group, said it could be a great investment and give farmers a voice in grain handling.
“Farmer investment in grain handling has dwindled with the sale of many of the farmer-owned grain companies over the past decade,” he said.
The grain facility would include condo storage available to commercial grain traders, handlers and end users. It would operate as a fee-for-service public house; commercial grain handlers wouldn’t have to build their own facilities.
Cugnet said CP and grain handlers have seen the concept, reacted positively and are curious to see what the producer interest is.
The first of 11 public meetings was scheduled Dec. 8 in Regina and Ogema. The others are in Weyburn, Carlyle, Radville, Estevan, Oungre, Montmartre, Milestone, Corning and Sedley.
The region is home to Weyburn Inland Terminal, the first producer-owned and operated terminal on the Prairies, which was sold to Parrish & Heimbecker nearly three years ago.
“We weren’t interested in just building another WIT,” Cugnet said.
“We don’t need to take that risk of inventory and being the brokers, necessarily.”
However, area farmers grow more than a dozen crops, and a facility that could handle them all would be a benefit to producers, he said.
Cugnet said crude oil producers could make money by shipping barrels on rail from the hub rather than shipping it by pipeline at a price discounted to the West Texas Intermediate price at destination.
Aggregate will be in strong demand if and when the twinning project for Highway 39 goes ahead.
“From a producer, farmer standpoint, we feel like there’s a lot of possibilities and positives, but what we’re looking to do is something that hasn’t necessarily been done,” he said.
Cugnet added that other concrete terminals don’t have the modern track infrastructure that could draw many customers to the hub.
“Our idea was if we’re going to put this money into this track infrastructure, why not try to utilize it as much as possible,” he said.
“When you’re putting that much money into a loop and you’re doing only a turn a week with one train, it just didn’t seem efficient or a good return on investment to have all that money tied up in an investment and not be using it.”
The funding model has yet to be finalized, but the proponents intend to sell shares and raise money through commercial partnerships.
The reaction at the producer meetings will help inform the final decision.