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WINNIPEG, Manitoba, June 1 (Reuters) - Global Grain Group (G3), which is taking control of grain handler CWB, has agreed to acquire a long-term lease at Port Metro Vancouver, paving the way for the first new grain terminal in nearly 50 years at Canada's busiest port, according to a source familiar with the matter.
The high-efficiency grain terminal would cost roughly C$500 million ($400 million) and ramp up competition in the world's No. 2 wheat exporting country, as CWB becomes a stronger player against Richardson International, Viterra Inc and Cargill Ltd.
New capacity to store crops at the port would also create opportunities to funnel more Canadian wheat and canola to Asia.
G3, a joint venture of U.S.-based Bunge Ltd and Saudi Agricultural and Livestock Investment Co (SALIC), will acquire the lease to West Lynnterm on the North Shore of Burrard Inlet, from Western Stevedoring, which currently operates a break bulk facility there, said the source, who was not authorized to speak publicly.
Western Stevedoring will become a minority partner in the grain terminal, which is subject to a feasibility study that could take four to six months, the source said.
The deal is expected to be announced early Tuesday. Spokespersons for CWB and Bunge could not immediately be reached for comment.
The terminal, which would be serviced by Canadian National Railway Co, would still need to clear regulatory hurdles to proceed.
In April, G3 said it would buy a C$250 million controlling stake in CWB, known for decades as the Canadian Wheat Board, which until 2012 controlled most of Western Canada's milling wheat and malting barley.
CWB, now a private grain handler, earlier acquired port facilities to move crops east from the Prairies to the Atlantic Ocean, but lacked the means to ship significant volumes off the West Coast.
China and Japan were the two largest importers of canola from Canada in 2013-14, and Japan was the second-biggest Canadian wheat importer.
The last new grain terminal at Port Metro Vancouver was built in 1968, although another terminal was reconstructed after an explosion in 1979.
Once G3 takes control this summer, CWB is expected to build or acquire more country elevators to collect crops on the western Canadian Prairies, especially in Alberta.
Cargill and Richardson International also handle grain on the North Shore. Richardson is scheduled to complete an expansion of its terminal this year. ($1 = 1.2527 Canadian dollars) (Editing by Richard Pullin)