VANCOUVER, BC,
Aug. 17, 2021 /CNW/ - On
July 22, 2021, Westshore Terminals
Investment Corporation (TSX: WTE) (the "Corporation") announced
that its wholly-owned subsidiary Westshore Terminals Limited
Partnership ("Westshore") had entered into a conditional agreement
(the "Agreement") to provide services to BHP Canada Inc. ("BHP").
As a result of BHP Group's final investment decision to proceed
with the Jansen Stage 1 project, the conditions precedent in the
Agreement have now been satisfied.
The Agreement requires Westshore to construct the
necessary infrastructure to provide port services to BHP's
Jansen potash mine in Saskatchewan (the "Jansen Mine") for a term to
2051, subject to extension.
Construction of Potash Facilities
Westshore is designing and will construct the necessary
infrastructure to handle potash, including a potash dumper, storage
building and associated conveying systems. In addition, certain
existing infrastructure at Westshore's terminal will be modified to
support handling potash. Potash will be loaded only at the
terminal's Berth 2, which will continue to be available for loading
coal. Coal operations are expected to continue without undue
disruption through the construction phase.
Westshore must obtain certain permits in order to commence
construction. Westshore has been in discussion with relevant
authorities, principally the Vancouver Fraser Port Authority
("VFPA"). Westshore anticipates that the required permits
will be issued in the first half of 2022, following which
construction will commence. The Agreement provides that the potash
infrastructure must be available by mid 2026.
BHP will substantially fund the construction, with
Westshore being responsible for construction costs in excess of the
agreed budget. Westshore will also contribute up to an aggregate
$33 million to costs related to
specific infrastructure or unexpected permitting conditions that
are encountered.
Provision of the Services
The Agreement provides for a fixed loading charge per
tonne that is indexed annually to changes in CPI for the life of
the Agreement.
BHP has committed to providing Westshore with minimum
annual volume commitments that are calibrated to the output of
Stage 1 of the Jansen Mine. Under the Agreement, if BHP
elects to invest in the next stage of Jansen, then its minimum annual volume
commitments under the Agreement will correspondingly increase to
reflect the higher output of the Jansen Mine. The minimum annual
volume commitments during both Stage 1 and Stage 2 of the Jansen
Mine represent a substantial percentage of the expected output of
the Jansen Mine while providing some flexibility for BHP to make
domestic sales.
The potash dumper and conveying system have been designed
to handle volumes equivalent to the maximum annual bulk material
throughput at Berth 2. For volumes above Stage 1, it is anticipated
that the potash storage building will be expanded, and the building
has been designed accordingly. BHP is entitled but not required to
use Westshore's facilities for increased output from the Jansen
Mine beyond Stage 2.
The Agreement requires Westshore to exercise its renewal
options under the lease of the terminal from VFPA to 2051. For
periods after 2051, provided BHP has exercised its option to extend
the Agreement and certain minimum annual volume requirements are
satisfied, Westshore must exercise its further renewal options
under the lease.
Berth 1 and the existing stackers will remain devoted
exclusively to coal, and Westshore does not anticipate that the
Stage 1 tonnage will result in a functional restriction on its
ability to handle current levels of coal throughput.
This news release contains certain forward-looking
statements that reflect the current expectations of the Corporation
and Westshore with respect to future events and performance,
including but not limited to obtaining the required permits in the
first quarter of 2022, timing of commencement of construction of
the potash facilities, Westshore's ability to continue handling
current levels of coal throughput while also handling potash at the
Stage 1 tonnage and the impact of the construction of the potash
facilities on Westshore's coal operations. Forward-looking
statements are based on information available at the time they are
made, assumptions made by management, management's good faith
belief with respect to future events, and will be impacted by and
are subject to a variety of known and unknown risks, uncertainties
and other factors that could cause actual events, performance or
results to differ materially from those expressed or implied,
including, without limitation, the following: difficulties or
delays in obtaining the necessary permits, including from VFPA;
unexpected requirements in the necessary permits; standard
challenges and unexpected complications during construction of the
potash facilities; and including those risk factors outlined in
Westshore's Annual Information Form, that could cause actual
performance or results to differ materially from those reflected in
the forward-looking statements or current expectations.
Forward-looking statements should not be read as guarantees of
future performance or results, and will not necessarily be accurate
indications of whether, or the times at which, such performance or
results will be achieved. There is significant risk that estimates,
predictions, forecasts, conclusions and projections will not prove
to be accurate, that assumptions may not be correct and that actual
results may differ materially from such estimates, predictions,
forecasts, conclusions or projections.
SOURCE Lawson Lundell Lawson
& McIntosh