A new Canadian-built grain export terminal at Northgate in southern Saskatchewan is booming these days.
Actually, the Northgate Commodities Logistics Centre about 60 km southeast of Estevan hasn’t seen too many slow days since the first railcars started rolling south in January 2015. Officially opened in May 2016, the 2.7 million bushel capacity grain terminal which has rail service connecting to BNSF (Burlington Northern Santa Fe) Railway is moving about 100 railcars per week, with a wide range of commodities headed to not only to U.S. markets but into Mexico, Europe and Asia.
On any given day this fall, anywhere from 50 up to 200 grain trucks from Saskatchewan and Manitoba farms within a 200 km radius of Northgate, are delivering to the facility built around the long-abandoned hamlet of Northgate where Highway 9 crosses the Canadian/U.S. border. The Northgate terminal is built along one of the few rail-crossing points along the U.S. border in Western Canada.
Offer a good package
The apparent success of the venture can be credited to a couple different features says Jason Labossiere, facility manager — the company is now contracting a wider range of commodities‚ and it offers very competitive prices. Depending on the end-use market demand often enough the company can even offer price premiums.
Announced as a $90 million project, Ceres began construction of the Northgate facility in 2014. With two-parallel 11 km (seven mile) rail loops, it is designed as a multi-commodity rail-handling facility. While the grain terminal was first, Ceres is also now moving about 150 railcars of propane per month from the facility. Plans continue (as the oil patch picks up) to also export about 60,000 barrels of crude oil per day from site. Construction is also now underway on a 26,000-ton fertilizer-storage facility for the Wichita-based Koch Fertilizer for distribution to its Canadian dealer network. The fertilizer warehouse should be completed by May 2017. And there are future plans for the facility to be a distribution depot for other oil and gas commodities and perhaps even farm machinery.
Busy from the start
In the fall of 2014 with the twin-loop rail track in place, and only two 280,000 steel grain storage bins on site, the company had a pilot run shipping railcars south. More steel bins were added in phase one in 2015, with the main concrete structure completed in phase two and opened in early 2016. “Even with the initial transloader and only two bins we managed to move about 1,200 rail cars of commodities into the U.S. between January and October 2015,” says Labossiere.
The grain-handling complex today consists of six steel bins, each with capacity for about 280,000 bushels (a total of 1.7 million bushels). There are three bins on each side of the one million bushel main concrete “house.” The concrete terminal is the main receiving point for grain trucks. It handles cleaning and sorting of commodities, which are then transferred to the steel bins, before being loaded into rail cars.
Initially as Northgate opened its doors it offered contracts for grains and canola. Today it offers a wide-range of contract options for all wheats, oats and canola and has recently added contracts for yellow peas, lentils, rye and flax. “About the only thing we don’t handle is malt barley,” says Curt Larsen, a senior contract manager.
The little known Ceres Global Ag is a Toronto based-company specializing in grain storage, handling and merchandising. What gives the company its marketing reach is ownership of the Minnesota-based Riverland Ag Corp. Riverland owns nine grain storage and handling assets in Minnesota, New York, and Ontario having total capacity for 47 million bushels. Riverland Ag also manages two facilities in Wyoming.
From its Northgate vantage point, Ceres connects with the BNSF railway, the largest rail company in the U.S. BNSF has direct access to 28 American states, numerous Pacific and Gulf ports, and Mexico along a 32,000 mile rail network, including more than 45 crude-by-rail destinations. And it also has secondary or inter-line connections with many other U.S. interior location and Atlantic ports. Once a commodity is in a railcar at Northgate, it can reach any number of U.S. or foreign markets.
In Western Canada along with Northgate, Ceres also has 25 per cent ownership in the Stewart Southern Railway Inc. — a 130 km-long southern Saskatchewan short-line railway.
“We’ve had excellent service from BN Rail — the railcars are here when we need them,” says Labossiere. “And we’ve also had excellent support from our customers in southern Saskatchewan and Manitoba. We offer very competitive pricing and have been taking delivery in a timely manner and occasionally have even called early so producers aren’t waiting. We have the markets. We are open for business.”