Westshore Terminals

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{{#badges: CoalSwarm|Navbar-Canadacoal}} Westshore Terminals is a coal export terminal located at Roberts Bank Superport in Delta British Columbia. It is Canada’s largest coal export facility, surpassing the combined coal shipments of all other terminals in Canada. Westshore is also the largest single export coal terminal in all of North America.[1]

Location

The port is located 32 kilometres south of downtown Vancouver at Roberts Bank Superport.

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Background

The Westshore Terminals Limited Partnership is owned by Westshore Terminals Investment Corporation, through its wholly-owned subsidiary Westshore Terminals Holdings Ltd. Westar Management Ltd. has a long-term, renewable contract to operate and manage the terminal.[1] As of 2011 Canada was the world’s seventh-biggest coal exporter.[2]

The terminal was built in 1970, and by 2010 had capacity of 29 million tonnes per year. U.S. shipments reached a record 2 million tonnes in 2009.[1]

The terminal's coal export capacity was expanded to 33 million tonnes per annum (mtpa) in 2013. Old equipment is being replaced to add an additional 2 to 3 million tonnes of capacity, for a total of 35 to 36 mtpa when completed.[3]

In 2013 the port handled 30.1 million tonnes of coal, of which 9.3 million tonnes was US steam coal. Overall, coking coal accounted for almost 60 per cent of total coal exports at Westshore in 2013, while steam coal was at 40 per cent. The company expects 2014 coal volumes to be roughly 31-32 million tonnes, and says it has contract commitments for more than 90 per cent of its annual capacity through 2021.[3]

In 2015 it was reported that Westshore Terminals will export only 24 million tonnes in 2016 due to coal companies cutting export volumes. Westshore Terminals’ upgrade may be affected with the possible cancellation of one of three new stackers on order if the market does not improve by late 2016.[4]

Coal Mines

Westshore draws its coal from four main sources:[5]

Most of the mines are large, open pit mines. Grande Cache has one surface mine and an underground mine and is seeking to secure permits to open another underground mine in future.

Coal Railways

Three major railways service the terminal:[6]

Ownership

The Westshore Terminals Limited Partnership is owned by the Westshore Terminals Investment Corporation. Westar Management has a long-term, renewable contract to operate and manage the terminal.[7]

In 1993, Canadian billionaire Jim Pattison took over management control of Westar, including Westshore Terminals,[8] and by 1997 had privatized the company.[9]

According to SSA Marine, a private cargo handling company, SSA entered into a joint venture with Westshore Terminals in 1990 to develop the Gateway Pacific Terminal at Cherry Point near Ferndale, Washington.[10]

Coal deals

Agreement with Teck Resources for expanded export

In October 2010, Canada-based Teck Resources Ltd. and Canadian Pacific Railway Ltd. unveiled a new 10-year agreement for moving coal from five Teck mines to the Pacific Coast for export. Financial terms of the deal, which will begin in April 2011, were not announced, but CP said it agreed to enhance capacity on its system to handle increased volume from the mines in southeastern British Columbia. Teck plans to increase coal production at the mines by 50 percent over the next few years, and was looking for an agreement that ensured the higher production could be moved to ports near Vancouver.[11]

Teck chief executive officer Don Lindsay said in a statement: “This agreement gives Teck the certainty we need to realize our growth strategy in coal and to deliver our increased production on a timely basis to our key markets.” The mining company won approval from Canadian regulators in 2009 to shift some of its coal traffic from Canadian Pacific to its larger rival Canadian National Railway Co., and it will continue to do that. The coal, used for steel making, is transferred to ships at Vancouver’s Westshore Terminals and Neptune Terminals, and Teck plans to continue using both facilities under the deal, it said.[11]

The terminal's coal export capacity was expanded to 33 million tonnes per annum in 2013.[3]

Cloud Peak Energy

In June 2011 Cloud Peak Energy signed a 10-year deal to ship basin coal to Asia from a port on Canada’s Pacific Coast. Cloud Peak Energy Inc. signed the deal with Westshore Terminals to ship coal through its Westshore Terminal in Vancouver, British Columbia. The company shipped 3.3 million tons of coal through the terminal to Asian customers in 2010.[12]

In 2014 Cloud Peak agreed to pay $37 million to boost its exports by 2 million tons through the Westshore Terminals in British Columbia. The company expects to export between 6 million to 6.5 million tons of coal annually over the next ten years. These exports will be shipped to Asia.[13]

However, in October 2015 Cloud Peak Energy said the company planned to put all coal exports on hiatus from 2016 through 2018. According to a company press release: "Cloud Peak Energy made an upfront payment to Westshore and will make quarterly payments from 2016 through 2018 in lieu of the previous take-or-pay commitments during this three-year period." According to the Sightline Institute: "Asian coal prices fell so low that Cloud Peak was losing more money shipping to Asia than it would from the penalties. So the company simply stopped shipping, coughing up US$11 million in penalty payments to avoid even steeper losses on exports. And it started negotiating a deal with Westshore to put all shipments on hold."[14]

Signal Peak Mine

In October 2011 Pinesdale LLC, a subsidiary of Swiss based Gunvor Group Ltd., paid $400 million for one-third ownership in the Signal Peak Mine. Gunvor announced plans on boosting the underground production from a stated 9 million tons a year to about 15 million tons and ship the coal to Pacific and Asia markets through Westshore Terminals in Vancouver, British Columbia. It was the company's first investment in a U.S. coal mine.[15] The mine is also co-owned by two Ohio companies, FirstEnergy and Boich Companies, as well as Pinesdale LLC. In October 2015 a Montana state agency rejected a 2013 permit issued for a major expansion of the mine.[16] Shortly after Signal Peak said it planned to trim exports through Westshore in 2016, and possibly in 2017 and 2018 as well.[17]

Coal exports exempt from BC coal tax

Although all the CO2 emitted by all B.C. businesses and residents -- for all cars, trucks, natural gas, coal, power plants, ships, and industry -- is subject to a carbon fee (adding up to 47 million tonnes of carbon in 2010), coal exports are not subject to such a tax. Carbon is taxed at $20 a tonne by the B.C. government, and B.C. businesses and residents paid close to a billion dollars in carbon pollution taxes in 2010. In comparison, 2010 coal exports amounted to 50 million tonnes of carbon pollution, all exempted from the B.C. carbon tax. Taxes collected by B.C. on mining also appear to be at the lowest level in many years, despite the price of coal going up: coal has increased $140 per tonne since 2006 - a 350 per cent increase in price in just six years, and jumping another $20 -- to over $200 per tonne -- in the first quarter of 2011.[18]

Project Details

  • Owner: Westshore Terminals Limited Partnership
  • Location: British Columbia, 32 kilometres south of downtown Vancouver, Canada
  • Existing Capacity (Million tonnes per annum): 33
  • Additional Proposed Capacity (mtpa): 3
  • Status: Operating
  • Start year: 1970
  • Type: Exports
  • Source of Coal: Coal mines in British Columbia
  • Cost of expansion:
  • Financing for expansion:

Resources

References

  1. ↑ 1.0 1.1 1.2 "Westshore Terminals" Westshore Terminals Website, accessed April 2011.
  2. ↑ "What Canada stands to gain from the global coal boom" Josh Wingrove, The Globe and Mail, September 23, 2011.
  3. ↑ 3.0 3.1 3.2 Sylvie Cornot-Gandolphe “US Coal Exports: The Long Road to Asian Markets,” Oxford OIES PAPER: CL 2, March 2015
  4. ↑ "WESTSHORE TERMINALS ANNOUNCES FURTHER DIVIDEND REDUCTION AND UPDATE ON CAPITAL PROJECT," Westshore Terminals, December 9, 2015
  5. ↑ "Westshore Terminals: The Mines" Westshore Terminals Website, accessed April 2011.
  6. ↑ "Westshore Terminals: The Railways" Westshore Terminals Website, accessed April 2011.
  7. ↑ "Main," Westshore Terminals, accessed Jan 2018
  8. ↑ "History" Jim Pattison Group, accessed April 2011.
  9. ↑ "British Columbia Resources Investment Corporation" Blurb Wire, date unknown.
  10. ↑ "History" SSA Marine, accessed April 2011.
  11. ↑ 11.0 11.1 "Teck, CP ink 10-year coal-hauling deal" The Globe and mail, October 6, 2010.
  12. ↑ "Cloud Peak Energy to send more Powder River Basin coal to Asia" Jeremy Fugleberg, Star-Tribune, June 15, 2011.
  13. ↑ "Cloud Peak taking more active role in coal debate: ‘We want it to be a factual discussion" Erik Olson, Billings Gazette, August 31, 2014.
  14. ↑ Clark Williams-Derry, "Coal prices now so low that Cloud Peak is paying Westshore NOT to export its coal," Sightline Institute, Oct 29, 2015
  15. ↑ "Swiss company with Russian ties buys into Signal Peak coal mine" Jan Falstad, Billings Gazette, October 18, 2011.
  16. ↑ "Signal Peak coal mine expansion plan hit by Montana," Platts, Oct 19, 2015
  17. ↑ "Two More Lumps of Coal for BC Exports," Sightline, Dec 18, 2015
  18. ↑ Barry Saxifrage, "Coal double-standard costs British Columbia's citizens billions" Vancouver Observer, June 3, 2011.

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