WINNIPEG, Manitoba (Reuters) - G3 Global Holdings said on Tuesday that it will study the feasibility of building a grain terminal at Port Metro Vancouver by 2019, which, if completed, would boost competition among Canadian grain handlers vying to buy farmers’ crops.
Winnipeg-based G3, which agreed in April to buy a controlling stake in grain handler CWB, will consider building at Lynnterm West Gate on the North Shore of Canada’s busiest port, with leaseholder Western Stevedoring as a partner.
It would be the first new grain terminal at the port since 1968, and expand the reach of CWB, which currently owns facilities to move grain east from the Prairies of Canada, which is the world’s No.2 wheat-exporting country.
G3 is a partnership between U.S.-based oilseed processor Bunge Ltd and Saudi Agricultural and Livestock Investment Co (SALIC).
G3 is considering a design to handle longer trains than at any other Canadian port terminal, with shorter unloading times, said G3 Chief Executive Karl Gerrand. Those features may make the terminal more efficient for deliveries, he said.
“We’re definitely breaking the mold on what has been the standard for the industry for decades. We’re trying to invest in efficiency that creates more system capacity and provides better access to export markets.”
G3’s Vancouver terminal plan was the deciding factor in the CWB selling it a stake, said Agriculture Minister Gerry Ritz. Ottawa currently controls CWB.
“This was one of the assets they brought to the table and no one else was prepared to go that far.”
While it may address some transportation issues by building more port capacity, the terminal may create others, said Mark Hemmes, president of Quorum Corp, which monitors grain transportation for Ottawa.
The North Shore is home to grain terminals owned by Richardson International and Cargill Ltd [CARGIL.UL].
Canadian National Railway Co owns the track, although Canadian Pacific Railway Ltd can also access the area.
CN spokesman Mark Hallman said its rail line is nearing capacity and CN is working with the port and governments to address the North Shore’s “last mile bottleneck.”
G3 is among several grain companies boosting capacity, following transportation snags that occurred while moving the record-large 2013 harvest.
Gerrand said G3 and Western Stevedoring needed to resolve issues like permits and hold talks with the community and the province’s native peoples.
The study may take six months, with possible construction starting in summer, 2016.
Editing by W Simon and Alden Bentley