In a special meeting earlier this week, port commissioners approved a trio of agreements to keep the port’s Terminal 5 on track to becoming a potash facility owned and operated by Australia-based BHP Billiton.
The first agreement, according to port officials, is an exclusivity contract where BHP Billiton pays to keep Terminal 5 off of the open market. A second agreement grants BHP site access for engineering and design work, and a third agreement allows the port to move forward with site improvements.
“These agreements basically allow us to move forward with the things that are necessary in order for BHP to start construction on a facility as soon as we have a ground lease in place because they want to be up and operational by 2015,” explained Theresa Wagner, communications manager at the Port of Vancouver.
Wagner said the port hopes to have a ground lease with BHP Billiton finalized by November. The company would then start construction on a facility immediately after that.
Curtis Shuck, director of economic development and facilities at the port, said this agreement with BHP is unique because as soon as the company takes possession of the property, “they don’t want the port anywhere near them.”
“They want complete control of their site because safety and security is absolutely a critical element for BHP Billiton, and so we have drafted this agreement to be respectful of that,” he stated.
Shuck said the site improvements at Terminal 5 include a proportional sharing of costs between the port and the mining company. Improvements will cover four main areas: rail, road, utility and site.
Rail improvements
The main portion of rail improvements at Terminal 5 will be to construct a track that’s exclusive to BHP Billiton.
As Shuck explained it, Terminal 5’s rail loop was originally designed to handle typical, modern day 120-car unit, 7,500-foot trains. But as the port developed the project with BHP Billiton, the company revealed the need to run 170-car unit trains that are more than 8,400 feet in length.
“As you can imagine we had to get our track structure out and go to work on expanding the loop. We’re essentially redesigning the facility to be able to handle those longer trains,” said Shuck.
Road improvements
As the port modifies the rail at Terminal 5, Shuck said the access roadway system will need to be modified as well. Because BHP’s facility will be located within the active train loop, Shuck said the port will install an exclusive rail crossing for the company. Another project will add a new overpass that lands within the loop.
Utilities
As it does with any tenant, Shuck said the port will work to supply water and sewer to the edge of BHP’s lease site. In addition, the port will construct a new $5 million electrical substation to support the company’s demand to power its facility.
“We are currently working with Clark Public Utilities on a deal to develop a substation that will not only support the BHP Billiton project, but will also support additional development at the port and additional things that Clark County is doing,” said Shuck, adding that BHP will have a proportional share of that cost as well.
Site works
The final improvement element regarding the BHP site, according to Shuck, essentially covers things like fencing.
When asked if the complexity of the project and the number of site improvements have been difficult for the port to take on, Shuck said it’s really just about getting done on a fairly fast-paced schedule in order to get out of BHP’s way.
“These types of projects don’t get done in a vacuum by a couple of people around a table in a smoky room – it takes everybody,” said Shuck. “This is a really good example of our partnership with the city of Vancouver and the other regulatory agencies. We wouldn’t be where we’re at today without those people standing side by side with us, and I really think BHP Billiton recognized that as being a significant strength of this particular site when they were doing their selections early on.”
