The once forgotten hamlet of Northgate is about to enjoy a rebirth as one of the most important exporting locations in Western Canada.
Ceres Global Ag. Corp unveiled plans for a $90 million commodity hub that will be located at the border crossing 60 kilometres east of Estevan.
The hub will have capacity to handle large shipments of both grain and oil and will also house a logistics centre that will allow for the transport of equipment and materials for the resource sector. Ceres is partnering on the project with the Scoular Company who will own and operate the grain handling side of the hub.
Ceres president Michael Detlefsen said Northgate was an ideal location for the hub as there was available land and a location that provided access to the Burlington National Santa Fe Railway's U.S. rail network.
"We're very excited because we think it's a good opportunity for Saskatchewan and Western Canadian businesses as it gives a new export avenue for grain farmers and energy producers and almost an entirely new way of getting products to market whether it's in the United States or further abroad," said Detlefsen.
"(The location) provided us with enough land to support all three business operations - our grain, the oil and the oil supply."
As was reported in the Oct. 3 edition of The Mercury, Ceres' purchased $1,500 acres of land at Northgate. That acquisition will allow them to construct two high efficiency rail loops which will each handle unit trains of up to 120 railcars - one for grain and one for oil. When operating at full capacity, the hub is designed to ship 40 million bushels of grain annually and 70,000 barrels of oil per day.
As there is no Canadian rail connection to Northgate, Detlefsen said the majority of products will be shipped to the site by truck.
"We looked at the draw area for grain and for oil and we think that within reasonable trucking distance, we can get more than enough grain to support the grain operation and more than enough oil to at least support the first phase of the oil operation."
Although news of the hub has been met with a positive reaction, there have been some concerns expressed about the potential increase in traffic on local roadways. Estevan Mayor Roy Ludwig said the City is pleased to hear about the hub and expects there to be positive spin offs for the City as well as local businesses.
"With the pipeline being such an environmental issue now, it's taking a long time to get them in the ground," Ludwig said. "The alternative to keep the revenue stream coming and keep the oil moving is going to be focused on rail, they've got no choice. They have to get the oil to market."
However, Ludwig said they do have a concern about the increased traffic and feels the Northgate announcement makes the heavy truck bypass around Estevan an even larger priority.
"All the time that we are waiting for this to come to fruition, our roadways are taking a beating and of course that comes at a cost again," Ludwig said.
"We're looking forward to (the hub). It's an opportunity for us for growth, but of course along with that comes the needed money to handle the growth."
Construction on the hub is expected to begin in the spring provided all the necessary permits and approvals are received. Detlefsen said the entire operation would be built up over a three-year time frame, but they are hopeful of shipping both oil and grain by the end of 2013.
It's anticipated that 100 jobs will be created during the construction phase. Another 30 jobs will be created once the facility is operating. Detlefsen said Ceres expects to draw employees within a 50-mile radius of Northgate.
Along with creating jobs, the hub is also expected to open new transport avenues for local farmers and oil companies. With its connection to the BNSF rail network, the hub will provide access to 45 crude-by-rail locations and customers in 28 states as well as Pacific and Gulf ports.
In a press release that accompanied the announcement, Scoular COO Bob Ludington said farmers in the province are poised for much greater participation in an expanding and competitive global market.
"This important project gives high quality Canadian wheat direct line access to U.S. and Mexican flour millers and will open extensive new markets for Canadian canola," Ludington said in the release. "The Northgate hub will serve to shrink the distance between Canadian supply and global demand, expanding the marketing options for area producers tremendously."
