U.S. ag commodities firm Ceres Global Ag, which in recent years has built up a Prairie grain and oilseed origination hub near the North Dakota border in southeastern Saskatchewan, now plans to crush canola there also.
The Minneapolis company said Tuesday it plans to spend US$350 million to build an integrated crush plant with capacity to handle 1.1 million tonnes of canola per year and is “engaged in discussions with other interested financial and industry players to fund the project.”
The plant, expected to be up and running by summer 2024, would be adjacent to the company’s grain terminal near the U.S. border at Northgate, Sask., about 60 km southeast of Estevan.
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Ceres’ proposed crush plant would have capacity to refine over 500,000 tonnes of canola oil per year to supply the food and biofuel markets, the company said.
“While there are multiple drivers contributing to this demand, the most important is the movement towards green energy and the need for vegetable oil as feedstock for the production of renewable diesel,” Ceres CEO Robert Day said in a release.
“We have been analyzing canola crush at Northgate for several years as its location along the Canada-U.S. border is ideally located to originate canola seed from our farmer partners, and with a direct connection to BNSF Railway, it provides the most efficient access to the U.S. market and U.S. ports.”
Ceres’ Northgate grain terminal already includes a 2.7 million-bushel shuttle-loading grain elevator and two 120-car loop tracks, which provide it with “construction-ready” infrastructure and shorten the new project’s timeline, he said.
Ceres said it expects the plant to lead to the creation of over 50 full-time jobs in Saskatchewan — where it will enter an increasingly crowded playing field for canola processing.
Winnipeg grain handler Richardson International, for one, announced in March it plans to about double the capacity of its canola crush plant at Yorkton, Sask. to over 2.2 million tonnes per year.
Last month, grain handling heavyweights Cargill and Viterra separately announced plans to build major canola crush plants at Regina, and Federated Co-operatives (FCL) announced a deal to buy the assets of renewable diesel processor True North Renewable Fuels.
FCL had said it was interested in processing renewable diesel next to its its major fuel refinery complex in Regina. However, that city’s land deal with Viterra for its crush plant site stands to break up the available land for such a project.
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Jim Titsworth, Texas-based BNSF’s director of agricultural development, said in Ceres’ release Tuesday that demand for renewable diesel feedstocks is “rapidly growing” and the Northgate site has “a unique location, both in Canada’s canola-growing region and with direct rail access to the major renewable diesel and food processing markets via BNSF’s network.”
The same rail network, he said, “also results in advantaged animal feed market access for canola meal.”
Ceres’ grain terminal was developed as part of a larger hub the company operates at Northgate, where it also handles commodities such as fertilizers and propane.
U.S. grain firm Scoular had planned in 2013 to build and operate the grain facility within the larger Ceres hub, but Ceres in 2014 cancelled that arrangement and moved to build the grain facility on its own.
Ceres — which already had set up a 2.3 million-bushel capacity grain terminal on the Welland Canal at Port Colborne, Ont., at a former Robin Hood flour mill it bought from Cargill in 2009 — has since expanded further into Prairie grain, oilseed and special crop handling and processing.
Its Prairie assets include the grain handling and soybean crush assets of Manitoba grain firm Delmar Commodities, which it bought in 2019, and a former Cargill grain elevator it bought last year north of Tisdale in northeastern Saskatchewan.
Other related Ceres assets include a 25 per cent of Saskatchewan shortline Stewart Southern Railway; a 17 per cent stake in Canterra Seeds; a Lake Superior terminal at Duluth; and grain terminals at Minneapolis and Shakopee, Minn.
To raise funds for the Northgate crush plant, Ceres said it will work in tandem with its own shareholders including New York-based firms VN Capital Management and Highbridge Capital Management and Minneapolis-based Whitebox Advisors. — Glacier FarmMedia Network
