By Christopher Williams
A new petroleum logistics company based in Calgary, Alberta and Bathurst, N.B, plans to construct a loading facility at the port of Belledune on Chaleur Bay in northeastern New Brunswick. The facility will consist of a low-speed rail circuit system, an oil terminal with eight 150,000-barrel steel storage tanks and a three-kilometre pipeline to be installed between the facility and the marine terminals at the port of Belledune. Canadian National Railways (CN) will deliver petroleum to the site for storage and loading aboard marine vessels for international markets.
“Construction is possible in 2015 and we anticipate that operations will begin between 12 to 18 months after shovels are in the ground,” explains John Levson, Vice-President of Chaleur Terminals Inc.(CTI). “We received the certificate of determination on our environmental impact assessment (EIA) application last July and are currently in the process of securing other permits and authorizations required for both construction and operation and do not foresee any challenges.” Levson says CTI’s capital invested is “a few hundred million dollars.”
Founded in 2014, CTI’s business model is to assist producers and buyers of petroleum products in shipping, sale and delivery. “CTI intends to transport heavy or medium oil primarily from Alberta and Saskatchewan via rail to customers located in Europe, Asia, India and the U.S., by ship,” explains Levson. “We are working on confidential commercial arrangements at this time.”
Private Sector Funding
Although CTI has not yet identified key construction contractors for the project, Levson says the company is committed to invest in the local community. There is no government funding associated with the project,” he said. “It will be 100 per cent funded by private sector dollars. Direct financial benefits from the proposed project are anticipated for the region as it will create over 200 jobs during construction and approximately 30 full-time positions for ongoing operations.”
Other ports considered
Mr. Levson says CTI considered different ports for the project including Saint John, NB, Dalhousie, NB, and other ports in Atlantic Canada and the Eastern U.S. CTI’s environmental assessment registration says Belledune was considered the best option due to its access to Chaleur Bay, existing rail infrastructure, lack of land-use conflicts, access to suitable property, its remote distance from the nearest residential community, a lack of potential environmental constraints and an available skilled workforce.
“CTI’s decision to locate in Belledune Port Authority’s industrial park is a true testament to the opportunities that develop based on good relationships and the entrepreneurial spirit of both CTI and Belledune Port Authority,” said Jenna MacDonald, Director of Marketing, Port of Belledune. “We have shipped petroleum products through these terminals for many years. Safety is always the top priority and will continue to be with this new development.”
Secures a regional rail service
Operation of the CTI facility project is expected to require the long-term use of the CN mainline, and could help ensure the rail line remains a transportation corridor for northern New Brunswick. “CN is the primary rail carrier for the proposed route and is responsible for the rail infrastructure, rail speed, time of trains and safety along the planned route,” notes Levson. “CTI is responsible for the facility’s rail system within the terminal facility which is just less than 18 kilometers of tracks with an inner loop, middle loop and outer loop, including unloading tracks located on the 250 acres of land.”
At the unloading tracks, liquid bulk cargo on the trains will be gravity-drained into a collection piping system where it is then pumped to the storage tanks. The facility will have capacity to receive, blend and ship different products, including refined petroleum. Products will be transferred via pipeline to marine vessels ranging in capacity from 250,000 to 650,000 barrels.
Time for a Belledune refinery?
CTI will have third berthing rights at the port after New Brunswick Power for its coal unloading operations and an existing tank farm leased to Irving Oil for 20 years. “We are currently in the first year of that contract,” says MacDonald when asked whether Irving could handle CTI’s petroleum exports. “The existing tank farm has a capacity of 285,000 barrels which is smaller than what CTI will be building for its operation.” The expected increases in petroleum products between the two terminals could re-open the discussion on the construction of a second oil refinery in New Brunswick. Last fall, the People’s Alliance party lost in the provincial election but party leader Party Leader Kris Austin raised eyebrows when he said potential exists for an oil refinery in Belledune. Austin said such a project could mean an economic turnaround for the northern region of New Brunswick that is experiencing higher than 20 per cent unemployment.
Adhering to regulatory requirements
Louis Paquin, a spokesperson for CN Rail, says CN has a number of safety precautions in place. “The maintenance and investments we do on that track are done regardless of whether we service Chaleur Terminals,” said Paquin.
Several communities along the rail route are concerned about an estimated 220 rail cars which will pass through each day. Further to recent train derailments of crude oil in Lac-Mégantic, Que., and Wapske, N.B, Guy Gallant, mayor of St-Alexis-des-Matapédia, Quebec, has called for a moratorium on the CTI project.
Levson emphasizes that the Chaleur Regional Service Commission and the Department of Public Security are helping with the emergency plan and his company will use the latest and highest standard of rail cars. “CTI is committed to a high standard of corporate responsibility and a proactive approach to environmental stewardship. We adhere to all regulatory requirements and industry best practices. The safety of our employees, contractors and the public is our top priority during the planning, construction and throughout the life of the project,” Levson stated. The facility requires a closed-circuit television surveillance system, sensors at connecting points and a fire detection and protection system for the entire site designed and built in accordance with the National Fire Code.