29 May 2008
Potential Potash Ports Narrowed to Two: Canpotex
Canpotex International Pte Ltd. has narrowed its search for a new
West Coast terminal to two sites, one in B.C. and the other in the state of Washington.
The company, the overseas marketer for Saskatchewan potash, is set to make a decision about the location of its greenfield terminal
shortly, said Jon Somers, the company's vice-president of planning and development.
Speaking at a Saskatchewan Mining Week luncheon on Wednesday, Somers said the new terminal will be built in Prince Rupert, B.C., or
Cherry Point, Wash.
"This is a primary focus for some of us in the company," he said during his presentation. "We have to figure out, where
is the next bottleneck? And the next bottleneck will be at the West Coast terminals because they won't be big enough to handle the
volume that's coming."
Demand for potash is growing on a global need for more food. More than 80 percent of potash mined in Saskatchewan is exported, Somers
said, adding Canpotex sells 10 million tonnes of potash per year on average.
The company has a long-term, exclusive agreement with Canadian Pacific Railway to cart potash from Saskatchewan west to
Vancouver and Portland, Ore., and east to Thunder Bay. Rail access is a logical transportation choice for the company, but it doesn't
come without obstacles, he explained.
"We have a substantial challenge. We are located 1,600 kilometres away from the coast, so we have to figure out how to get the
potash through the Prairies and over the mountains in plus 40 and minus 40 (temperatures)," Somers said.
With growth in the industry expected to continue, Somers said Canpotex is prepared to invest in its overland transport systems in order
to handle the increasing load. By the end of 2008, the marketer will own 5,500 railcars, he said, adding the company plans to expand
its Neptune terminal in Portland in addition to the new West Coast project. During the past several years, the company has invested
more than $370 million US in rail upgrades for its product.
At the International Fertilizer Industry Association convention in Vienna, Austria, last week, Canpotex CEO Steve Dechka told Canwest
News Service the expansion of the Canpotex terminal in Vancouver was also an option for the company.
The two sites left on the shortlist both have pros and cons - Prince Rupert is only accessible by one rail line, but is one day closer
to the Asian market. The Cherry Point site would have to be built from scratch, and shipments would cross the border, but large ships
would have easy access to the site.
No matter which site is chosen for the project, Dechka said, it will be the world's largest potash terminal. The project will cost
Canpotex's owners, Potash Corp. of Saskatchewan Inc., Agrium Inc., and Mosaic Co., between $300 million US and $500 million
US.
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