(Adds grain handler group comment)
By Rod Nickel
WINNIPEG, Manitoba Dec 21 Canada's G3 Global
Holdings LP will build a grain terminal at Port Metro Vancouver
by 2020, increasing the flow of wheat and canola to Asia and
Latin America, the company said on Wednesday.
The Winnipeg-based partnership of Saudi Arabian agriculture
company SALIC and U.S. grain handler Bunge Ltd had been
considering the project, which will cost more than C$500 million
($373.64 million), since last year.
Some in the industry worry the new terminal may worsen
congestion at the port.
G3 Global, which acquired the Canadian Wheat Board and
Bunge's Canadian grain operations in 2015, is a small player in
a Canadian industry dominated by Richardson International and
Glencore Plc unit Viterra Inc.
The terminal, capable of handling 8 million tonnes of crops
annually on the north shore of Burrard Inlet, would be the first
new grain facility in nearly 50 years at the port, Canada's
busiest. Canada, a major canola and wheat shipper, has recently
produced some of its largest harvests ever.
The north shore is home to grain terminals owned by
Richardson and Cargill Ltd as well as Neptune
Terminals, which handles potash and coal. It is served only by
Canadian National Railway Co track.
Adding G3's terminal, which will store up to 180,000 tonnes
of crops, and Kinder Morgan Inc's planned oil pipeline
expansion, may "significantly exacerbate" congestion, said Wade
Sobkowich, executive director of Western Grain Elevator
Association, whose members include Richardson and Viterra.
Without major government spending to ease bottlenecks and
improvements through federal railway legislation, terminal
investments may not produce net gains for the industry, he said.
G3's terminal will include a unique loop track, allowing
three 134-car trains to unload without stopping, however.
"We think we are the solution, not the problem," G3 Chief
Executive Officer Karl Gerrand said in an interview, adding that
he expects "very competitive" jostling among shippers for rail
CN spokesman Jim Feeny said the railroad, port and shippers
were working with Ottawa on long-term solutions to the north
To feed the terminal, G3 plans to build eight to 10 more
country elevators in Alberta and Saskatchewan to collect grain
from farmers, Gerrand said.
Elevators cost up to C$45 million each to build, but G3 has
no plans to go public to raise funds, he said.
The company has seven elevators across Saskatchewan and
Manitoba, along with port terminals in Ontario and Quebec.
Peter Kiewit Infrastructure Co is the design-build
contractor, with construction starting in March.
($1 = 1.3382 Canadian dollars)
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by
Jeffrey Benkoe and Lisa Von Ahn)