Port of Vancouver negotiates lease for commodities delivery hub at Terminal 5
The Port of Vancouver's business recruitment efforts may pay off in a big way – that is, if a deal for 30 to 40 acres of port land for use as a potash export facility goes through.
BHP Billiton, one of the world's largest mining corporations, confirmed Aug. 11 that the Melbourne, Australia-based company had entered into a preliminary agreement with the port, identifying a parcel at recently-opened Terminal 5 as a primary option for a new export facility for shipping potash, a potassium compound used principally as a mineral fertilizer for crops.
News of the preliminary agreement came just one day after the port's Board of Commissioners gave final approval for a sale of 22 acres of land to Farwest Steel, clearing the way for the construction of a $25-30 million facility expected to create 225 jobs.
Bronwyn Wilkinson, a spokesperson for BHP, cited the potential capacity of the port as a major factor in choosing Vancouver as its first-choice location. With the recent dredging of the Columbia River to accommodate larger ships, as well as an expansion of the port's rail network as part of the West Vancouver Freight Access project, the port's export capacity has significantly improved in recent years.
"We performed a very long review process and Vancouver was simply the best overall option for our needs," Wilkinson said.
The export site itself will consist of a storage building and handling facility to load the potash onto ships. Estimates of how much the lease agreement will be worth have not yet been released, nor have revenue projections. However, port officials can confirm that the deal will be "extensive."
"It's a huge project. Probably the biggest the port has ever seen," said Theresa Wagner, communications manager for the Port of Vancouver.
While the potential deal with BHP Billiton may be large in scope, it will not necessarily be a big job creator when the proposed export facility is completed, according to Wagner.
"The scope of the project is not in how many jobs this will create, but in how much it will improve the port's revenue," Wagner said.
The project would almost certainly deliver in that regard if ultimately finalized. The port currently exports approximately five million tons of freight annually. However, the BHP Billiton deal has the potential to double that figure, with a projected eight million tons of the freight expected from the new export facility annually, according to Larry Paulson, executive director at the Port of Vancouver.
While final agreement has yet to be reached between BHP Billiton and the Port of Vancouver Board of Commissioners, port employees are hopeful that a lease will be signed by 2012.
"All I'm hearing from BHP Billiton is that this is going to happen," Paulson said. "We're hoping to have the project completed by 2014 and have it go into operation by 2015."
