By R. Bruce Striegler
Prince Rupert Port Authority President and CEO Don Krusel says, “The real attention is on our intermodal container activity. Our container volume is up, and as of the end of this September, it’s up by 30 per cent.” Krusel notes that this puts the port ahead of last year, and he says the benefits of a diversified cargo base are evident. “The coal industry has been impacted by low global prices, coal mines in northeastern B.C. have closed and coal shipments have declined dramatically.” Softening this loss, Krusel says grain, containers and new cargoes such as wood pellets are helping to fill the coal void.
In April this year DP World Limited announced its agreement to acquire Maher Terminal’s Fairview Container Terminal from Deutsche Bank AG. “There has been much going on in the container sector at the port, and we look forward to working with DP World once the final transition takes place,” Krusel says. With a current capacity of 850,000 TEUs, Fairview Terminal was the first dedicated intermodal (ship to rail) container terminal in North America and has the advantage of being up to three days closer to Asia than any other North American port. “More significantly, our expansion at Fairview is underway, which will increase our capacity to about 1.35 million TEU’s by 2017.” Phase two of the Fairview container terminal will expand the wharf to 800m in length and enable an increase in throughout capacity to 1.2 million TEUs per annum.
Maher’s ship-to-rail terminal at Prince Rupert reportedly has been more profitable than the company’s New York-New Jersey terminal. Deutsche Bank began looking for buyers in 2014 after writing down a large percentage of the $2.3 billion the German bank paid to buy the container terminal operator in 2007. For DP World, the Prince Rupert concession runs to 2034 with an extension to 2056 after the completion of the expansion program. The terminal acquisition is DP World’s second Canadian operation, after Port Metro Vancouver’s Centerm Terminal.
“The volumes are growing, and all signs point to continued growth, as seen by a new shipping line, Maersk Line, calling at Prince Rupert.’’ Mr. Krusel adds that the second Maersk vessel to call had just berthed, the first arrived a week earlier in October. The 2M Alliance of Mediterranean Shipping Company and Maersk Line (a unit of the A.P. Moller-Maersk Group, based in Copenhagen) has added the port of Prince Rupert as the first North American port of call to its amended TP8 transpacific service.
Global commodities markets dictate coal and potash developments
Responding to a question as to whether or not this spring’s labour turmoil on westcoast American ports may have contributed to Prince Rupert’s continued growth, Krusel replies, “There’s no doubt Vancouver and Prince Rupert have benefited from that labour disruption, but if it were just about labour trouble, we’d be seeing that trailing off now, since the U.S. operations are back to full operation.” Krusel says, “Instead, “we’re seeing volumes continue to grow. What we see is that our success shows our value proposition is holding.” He adds that with the volume Prince Rupert is handling, “We remain very fluid, our commitment to speed and reliability through this gateway and this transportation corridor to the mid-west is proving the underpinning of our success.”
Krusel continues, “The weakness in the coal market is having an impact on our overall numbers, but our container sector is expanding quite rapidly. We’ve had a full year of operation from Pinnacle’s Westview wood pellet terminal, which is showing tremendous growth. Year-to-date, wood pellet volumes through Prince Rupert are up 60 percent. Those two sectors along with our grain terminal is showing a steady business.”
The impact of declining coal shipments can be seen in the annual report letter from the President of Ridley Island Terminals Inc.; “The year 2014 has been a difficult one in many respects.” The letter continues, saying that the sale process for the terminal has failed to move forward, that the years of work to create viable cooperation with First Nations has eroded due to title issues related to the proposed sale. The Ridley Island Terminal has been loading coal for 30 years, and in recent years has installed a third stacker/claimer. In 2014 a new tandem rotary dumper and a new thaw shed was added doubling total terminal capacity from the current 14 million tonnes. After four consecutive years of growth, 2014 saw a decrease in volumes. Terminal rail unloadings decreased by 41 per cent, or 4,793,000 tonnes during 2014. Shiploading volumes decreased by 41.3 per cent or 4,870,000 tonnes during 2014 with loading volumes reaching 6,919,000 tonnes.
Replying to a question regarding developments around the proposed Canpotex potash terminal at Ridely Island, Krusel responds, “Canpotex is weighing its final investment decision against the strength of the potash market and is eager to move forward with that project as soon as international markets show the demand.” In the fall of 2014, Canpotex announced it had received all required government environmental permits for the Prince Rupert export terminal and had signed a lease agreement. No date has been set for a final decision, but should the terminal proceed, it would be an investment worth approximately $775 million.
Canpotex says it already has invested approximately $50 million to date in the proposed project, which includes $15 million towards the Prince Rupert Port Authority Road Rail Utility Corridor. With a terminal at Prince Rupert, the company would have three gateways and rail corridors to the westcoast. If or when the project proceeds, it will consist of a marine wharf, access trestle, causeway and all weather ship loading facility capable of receiving vessels of up to 180,000 deadweight tonnes. Plans include an 180,000 tonne potash storage building with associated conveyor and dust collection systems, an automated railcar unloading and conveyor system, and settling pond for storm and wash-down water.
Port infrastructure work and dedicated community involvement builds for the future
In May of this year, Prince Rupert Port Authority completed the $90-million Road, Rail and Utility Corridor. The project involved the construction of five parallel rail tracks, a two-lane roadway, and a port-owned power distribution system along an eight-kilometre corridor. Mr. Krusel comments, “The success of the project exemplifies what can be accomplished when a strategic, long-term vision is executed by a partnership of public and private investment.” The Governments of Canada and British Columbia each contributed $15 million, CN invested $30 million, Canpotex provided $15 million, and Prince Rupert Port Authority provided the balance. One of the notable aspects of the construction was the inclusion of First Nations businesses. Prince Rupert Constructors, a joint venture between Coast Tsimshian Enterprises (a local First Nations firm), JJM Construction Ltd., and Emil Anderson Construction Inc., completed roughly 75 per cent of the work on the project. Coast Industrial Construction, a partnership between ICON Construction and the Gitxaala Nation (Kitkatla), was responsible for the remaining quarter of construction.
Proposed new export terminals for LNG (liquefied natural gas) were central in last year’s report from Prince Rupert, but oversupply in global markets has created a drawn-out process for corporate decision making. “We’re still looking forward to Pacific Northwest LNG finalizing all their environmental review requirements and moving that through the final stages of the process, and we still look forward to its final investment decision. If that decision does not materialize by the end of this calendar year, we’re anticipating a decision in the first quarter of 2016,” says Krusel.
Turning to the port’s relationship with the community, Krusel says, “We’ve made a considerable investment in both time and dollars to improve the marine safety and security around the port, which is part of our mission to give everyone confidence that as our volume grows, that growth will take place in a very safe and secure manner.” The CEO cites the new shore-based radar system about to be installed, a five million dollar project which should be operational by 2016. “That’s going to give everyone ‘eyes on the water’, right out to the open ocean. This is a big improvement for this gateway. As well, we’re spending a lot of time implementing aids to navigation in partnership with the Coast Guard, which includes a number of tide and current monitoring systems and we’ve put them on-line.” Mr. Krusel says that these improvements will benefit small pleasure craft, fishing boats as well as deep-sea traffic.
In 2009, Prince Rupert Port Authority created the Community Investment Fund. Using a share of the Port Authority’s annual income, funds are allocated to community groups that contribute to the region’s quality of life. A combination of funding sources which includes local business and government agencies has enabled millions of dollars to be bestowed on local organizations and institutions. In 2015, Krusel says the Lester Centre for the Arts, one of the community’s most utilized public assets, needed emergency repairs to its roof. “We partnered with the City and made a significant contribution, and moving as quickly as possible before winter rains, to support the roof repairs.” Over the past years, the port has also made significant contributions to the arts centre lighting and staging requirements. “We originally set up this fund specifically to advance the educational, cultural and arts activities to enhance the liveability of the community.”