Northgate 鈥� Ceres Global Ag is continuing to develop its Northgate Logistics Hub on the border between Saskatchewan and North Dakota, and energy is becoming a growing part of that.
The project was intended to begin as a grain terminal and crude-by-rail hub, but it went into operation just as the oil downturn hit and crude-by-rail facilities were 小蓝视频 mothballed in several places across Saskatchewan. Therefore, the crude-by-rail plan has not been implemented to date. However, in the intervening years, the shipment of natural gas liquids, propane, in particular, has grown to the point where in June, 2019, Ceres created a 50/50 joint venture with Steel Reef Infrastructure Corp., and oil and gas infrastructure company, which owns operates several gas plants in the province of Saskatchewan. Several of those plants are within a 16 to 60 kilometre radius of the Ceres terminal.
The joint venture is known as the 鈥淕ateway Energy Terminal.鈥� It began operations July 1, 2019. 聽
On Dec. 12, Government Relations Minister and Estevan 小蓝视频 Lori Carr and Highways and Infrastructure Minister Greg Ottenbreit came out to the facility to speak to Ceres president and CEO Robert Day, along with several other Ceres and Steel Reef officials about developments at Northgate. The Ceres officials came up from their headquarters in Minneapolis. There was also representation from the City of Estevan.
Paul Ferguson is general manager of energy and industrial products with Ceres.
鈥淲e鈥檙e going to talk to the Ministry of Highways and Infrastructure about what we鈥檙e doing here and how we can align with the government鈥檚 goals, and how to maximize opportunities,鈥� Day said prior to their meeting with the ministers.
鈥淭he focus of our near-term growth is more around the non-grain and energy industrial products and how we create opportunities to open into new markets for those product segments.鈥�
Carr said, 鈥淚鈥檓 here to see the facility, and the opportunities for economic development in the area, and how we might tie that into maybe some businesses that could set up around Estevan and make it work.鈥�
Ottenbreit said, 鈥淔rom my perspective in Highways and Infrastructure, rail is a very important part of our infrastructure in the province. We want to get a good handle on what the facility does, what it has to offer, how it interacts with the rest of our rail infrastructure in the province. And, of course, also roadways, as there is some product brought here by road to be shipped by rail.
鈥淎s we are an export-based economy, exports are very important to us. So it鈥檚 every important to keep abreast of these facilities, opportunities, and where we can expand opportunities for export. We鈥檙e bound by not having access to tidewater, so we have to be very supportive and very aware of these different infrastructure advantages that we do have, to take advantage of those for benefitting our export-based economy and to benefit the people and the industries in our province.鈥�
Ottenbreit said Saskatchewan will focus on pipeline development, but added, 鈥淲e envision a place where we produce more than we could ship by pipeline, possibly. Always having that rail access is very important, as it has been a foundation in getting our oil to market, as well as pipelines. I see both of them serving a definite benefit.鈥�
Unique facility
The Northgate site is unique in that it is not on the Canadian National or Canadian Pacific railways. Instead, it has a loop track (two, actually) as well as ladder tracks, connecting directly to the American BNSF Railway right at the U.S. border. With significant customs controls in place, the facility is positioned to allow direct shipments into the American heartland, or from it. They ship Canadian grain, oriented strand board (a late 2018 addition) and propane out of Northgate. Agricultural fertilizer and oilfield chemicals are shipped into the site.
鈥淲e鈥檙e looking to expand,鈥� Day said when asked about their NGLs handling. 鈥淭here are more NGLs produced in the Saskatchewan market that we could be providing a market for, and we expect production in this region will continue to increase in the years to come.鈥�
鈥淚n this joint venture, we are 50/50 partners. They (Steel Reef) have an obligation to manage the commercial part of the joint venture, and we support their commercial efforts when we can add value. Meanwhile, Ceres is responsible for running the operations here at Northgate.
鈥淪teel Reef also leads any effort around infrastructure development,鈥� Day said.
NGL expansion considered
Right now, the NGLs are 小蓝视频 transloaded, in other words, from a truck, through a meter system, to the rail cars. Using that system means rail cars can only be loaded during the hours the terminal and its gates are open, and that isn鈥檛 24/7.
鈥淩ight now, we are evaluating whether it makes sense to add infrastructure that would make our truck-to-train loading more efficient. Specifically, we鈥檙e looking at the benefits of enabling 24-hour truck unload, faster train loading, etc. No decisions have been made yet, however, this is where we are leaning today. Ultimately, the goal is to connect by pipe, into Northgate. That鈥檚 the goal,鈥� Day said.
Steel Reef鈥檚 nearest gas plant, at North Portal, is 16 kilometres away. That plant also connects into the company鈥檚 North Dakota gathering system and Lignite gas plant via a short, but important, international pipeline. 鈥淭here haven鈥檛 been any decisions made yet. North Portal would be a logical one, but that could change,鈥� Day said.
The concept 小蓝视频 considered right now would have an unloading site and storage bullets built just off Highway 9, near the existing approach to the highway. This would allow trucks to unload there, into storage, without them having to come into the main terminal area. This would also allow for some surge capacity, Ferguson noted.
Loading trains from bullets is also faster than transloading from trucks. 聽
鈥淥ur ultimate goal, at Northgate, is to have the infrastructure needed to make the supply chain through Northgate as low cost and efficient as possible,鈥� Day said.
As for timelines, Day said they are evaluating the truck infrastructure for summer/fall 2020.
Alvin Chim, a business development representative with Steel Reef, said, 鈥淲e are looking at it right now, but no decisions have been made. We鈥檙e really happy with our partnership with Ceres. They bring a lot to the table in terms of helping extend our service offerings for our customers by safely rail loading the natural gas liquids that are available.鈥�
As for the ministerial visit, Day said, 鈥淲e鈥檙e hoping to get more clarity on what their goals and objectives are, and how we can potentially help them achieve those goals.鈥�
Crude-by-rail considerations
This meeting occurred a few days after a crude-by-rail derailment near Guernsey, Sask. As for the possibility of crude-by-rail, Day said, 鈥淲e continue to investigate that as an opportunity. It鈥檚 a dynamic market, put it that way.鈥�
鈥淲e鈥檙e not currently planning to move any of these products, by rail, in Canada. At Northgate we are connected only to BNSF, and we know BNSF goes to extremes to ensure the safety in the movement of these products.鈥�
鈥淭here have been times, in recent history, when we got very close to moving crude oil through Northgate. There are so many factors that can impact that opportunity, positively and negatively, which makes it very difficult to determine whether or when and opportunity is going to materialize. Politics, market volatility and currency movements all influence the attractiveness of this opportunity. We鈥檙e confident at some point in time, in the future, eventually there will be an opportunity.鈥�
Asked if US$58 per barrel of oil was the issue, he said, 鈥淔or us, it鈥檚 more about the spreads than the absolute value of oil.鈥�
Ferguson said that Saskatchewan is a resource-rich province. 鈥淭his facility provides that great access point for Saskatchewan products. That example of lumber 鈥� this product is trucked nine hours to get on the BNSF Railway.鈥�
鈥淲e encourage other companies looking to find new markets in the U.S., to explore working with us here in Northgate,鈥� Day said.
