Ceres Global Ag Corp. is partnering with The Scoular Co. to build a $90 million commodity logistics hub in Northgate, Sask., connected to BNSF Railway’s U.S. rail network.
Ceres, a public company whose shares trade on the Toronto Stock Exchange, also owns 100 percent of Riverland Ag Corp., a Minneapolis-based grain storage business that operates 15 grain storage facilities in Canada and the United States and has total storage capacity of 55 million bushels.
As the Western Producer reported in September, Ceres has been assembling land for more than a year at Northgate, about 50 kilometres east of Estevan, Sask., and in the centre of the booming Bakken oil zone.
In a news release, Ceres says it now owns 1,500 acres of land at Northgate, where it intends to build a commodity shipping centre including two rail loops, each capable of handling unit trains of up to 120 rail cars.
One loop will be dedicated to a grain handling and shipping facility, and the other to transloading and shipping oil, Ceres said in the release.
Also, a logistics centre will unload imported equipment and materials for the resource economy.
Scoular, a major U.S. agricultural marketing company, will fund, own and operate the grain handling facility.
Riverland Ag will be a major customer of the grain facility and will work closely with Scoular on the procurement of certain grains, the release said.
The oil rail shipping operation will help address the pipeline capacity shortage that has become a major disadvantage for Canadian petroleum producers.
Ceres said work is expected to begin in the spring, subject to achieving necessary permits and approvals and the finalization of agreements with project partners.
It hopes to make grain and oil shipments later this year.
Construction is expected to be phased in over three years.
The project is designed to handle up to 40 million bushels of grain annually and 70,000 barrels of oil per day.
Ceres expects more than 100 construction jobs will be created, as well as about 30 jobs once the facility is fully operational.
The connection to BNSF’s network will give shippers direct access to customers in 28 states, numerous Pacific and Gulf ports, and Mexico along BNSF’s 51,000 kilometre network.
“The Northgate hub is good news for Canada’s economy and particularly good for Saskatchewan and Western Canada. 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,” Michael Detlefsen, president of Ceres, said in the release.
Bob Ludington, chief operating officer of Scoular, said the project would provide more options for prairie farmers.
“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.”
Ceres has experience moving oil by rail through its ownership of Stewart Southern Railway, a Saskatchewan short line.
“Our discussions are nearing completion with a number of Canadian energy companies for take-or-pay oil transloading contracts at the Northgate facility,” said Detlefsen.
Saskatchewan’s economic development will also benefit from the facility’s new import and distribution centre for equipment and materials needed by its booming energy and agricultural industries.