Ceres has purchased 1,500 acres of land at Northgate where it intends to construct a new commodity logistics hub including two high efficiency rail loops, each 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 center will unload imported equipment and materials for Saskatchewan's booming resource economy.
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 32,000 mile network, including more than 45 crude-by-rail destinations. Access to many other strategic interior locations and Atlantic ports are available through BNSF's rail connections.
Construction is planned to commence in the spring, subject to receipt of all necessary permits and approvals and finalization of agreements with project partners, with initial grain and oil shipments expected later in 2013. The facility will be built out during 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.
The Scoular Company (Scoular), a U.S.-based agricultural marketing 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. 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," said Michael Detlefsen, president of Ceres.
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. "We are building on the significant experience we have gained from our investment in the Stewart Southern Railway, one of the largest transporters of oil by rail in Western Canada. 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.