Port Metro Vancouver (PMV) could face new competition in its coal and commodities export business if a proposal for a new dry-bulk terminal in Cherry Point, Washington, proceeds.
The project, which has been contemplated for decades, gained new momentum recently when proponent SSA Marine submitted a proposal for its Gateway Pacific Terminal to environmental regulators. The terminal’s name is virtually identical to PMV’s branding as the Pacific Gateway or Canada’s Pacific Gateway.
Bob Watters, SSA Marine vice-president-director of business development, said the company hopes to complete the permitting process by late 2012 and open the new facility in early 2015.
The $500 million terminal would handle dry-bulk commodities, including coal, grain, potash and calcined coke. The facility would be designed to accommodate 48 million tonnes annually of open-storage commodities such as coal, plus six million tonnes of closed-storage commodities such as grains and potash. While some of that capacity will be added based on market demand, SSA Marine plans to initially build at least 25 million tonnes of coal-handling capacity. Port Metro Vancouver’s coal exports, driven by high Asian demand, surged 25% in 2010 to hit 30.3 million tonnes.
Watters said there’s market demand for a new terminal without luring away Vancouver’s export business – notably for coal. He said Delta’s Westshore Terminals, Port Metro Vancouver’s largest coal-export facility, is at capacity. “And there’s still demand for more capacity out there.”
Westshore representatives were unavailable for comment by press deadline.
But Port Metro Vancouver’s COO Chris Badger said the new terminal would be competition for the port’s dry-bulk terminals and will require PMV to demonstrate a competitive advantage.
“Our job is just to show that we’ve got the capacity and a better mousetrap north of the border.”
Watters said SSA Marine has owned the Cherry Point site since the early 1990s. It has been contemplating a terminal plan there since the late 1990s; however, he said at that time the waters surrounding Cherry Point were designated an aquatic reserve, but no management plan for it was created. That missing management plan, he said, has long stalled the project’s momentum. The finalization in late 2010 of an aquatic reserve management plan for Cherry Point has given SSA Marine’s plan new momentum.
Since launching the project officially, SSA Marine has also announced an export agreement with Peabody Energy (NYSE: BTU) to ship low-sulphur coal from Peabody’s Powder River Basin operations through the proposed Cherry Point terminal.
Watters said the company is pursuing other customers, including grain producers and BP (NYSE: BP), which operates an oil refinery at Cherry Point.
As to the overall impact for the region, Watters said the terminal’s construction will create 3,500 jobs in Whatcom County, where 3,000 construction workers are unemployed. Longer term, he said, the terminal will provide employment for longshoremen.