Posted on September 1, 2016
By Tom Ayers, LocalXpress
With analysts and industry observers suggesting commodity prices are finally on the rebound, Provincial Energy Ventures is moving ahead with a $75-million expansion of its coal transshipment pier in Sydney Harbour.
The company has spent about $12 million preparing the site since the expansion project was announced in 2012, president Ernie Thrasher said on a recent tour of the coal pier in Harbourside Park, and dredging the harbour channel and docking area by the wharf is expected to begin next year to allow larger ships to take American coal to international markets.
That prep work has included creating an earthen berm to close off an old cove used by the former steel plant, and installing a computer-controlled dust suppression system that will check local weather conditions and spray water on coal piles as needed.
In recent years, the international price for coal has fallen, in part due to lower oil prices and a worldwide glut of coal. Thrasher said prices are on the upswing and now is the time to finish the expansion.
“We already have the dredge permit,” said Thrasher. “We did all the work with this site and this berm so that we’d be ready to have our project moving when the market started to improve, and we’ve already seen what we believe is the bottom of the commodity market.
“Whether it’s oil, gold, silver, coal, copper — all of the commodities appear to have bottomed and are already starting the recovery in the economic cycle.
“We anticipate that the coal market will recover sometime in 2018-2019. We wanted to prepare a year or two in advance so that our project would be up and running for that time period.”
Provincial Energy Ventures is a Canadian company whose parent is based in Pennsylvania. Thrasher said the expansion is needed to accommodate U.S. coal from Pennsylvania and West Virginia that will be shipped through the Great Lakes to Sydney for transshipment on larger vessels headed for Europe and elsewhere.
Cape Breton Regional Municipality Mayor Cecil Clarke said combining the coal pier dredging with work needed to deepen the area around the Sydney marine terminal in anticipation of the municipality’s proposed cruise ship terminal expansion will generate cost savings that might benefit other operations around the harbour.
Clarke said McKeil Marine in Sydport Industrial Park, across the harbour from the coal pier, is looking at dredging in front of its wharfs and will pay its share of the cost, and the Canadian Coast Guard College and Northern Yacht Club may also be interested in having some dredging done while the equipment is in the harbour.
“The actual mobilization and decommissioning — the ramping up and down — of the dredge activity is the most cost-intensive part of it,” the mayor said. “So the opportunity for us is how do we look at getting all the economies of scale.”
The municipality has budgeted about $1 million for dredging to deepen the wharf area at the cruise ship terminal. Clarke said consultation with the harbour fishery and First Nations will have to take place before any other dredging — separate from the work at Provincial Energy Ventures — can go ahead.
Thrasher said the coal pier work will be done regardless of any other potential dredging partners, but the company is willing to work together to make it cost-effective for everyone involved.
That might even bring down the overall cost of the coal pier expansion project by 15 to 20 per cent, he said.
“We have to co-ordinate with the other groups, because we don’t want to take a unilateral decision and do this on our own, and then find out that the other people were disadvantaged somehow,” Thrasher said.
“But if the commodity market continues as it is, we’ll be gung-ho to get going in 2017.”
Provincial Energy Ventures has a permit to store 750,000 tonnes of coal next to Sydney Harbour, but Thrasher said the site will likely hold 200,000 to 300,000 tonnes at any one time.
In all, the company plans to move five million to seven million tonnes of coal annually through its operation, he said.
The coal arrives already processed and is merely bulk-loaded onto larger vessels. The company has one employee at the site now and uses local contractors when needed. The expansion will lead to employment for up to 25 people, said Thrasher, and more work for local contractors.
Clarke said he remains confident the provincial and federal governments will agree to cost-share the proposed $20-million expansion of the Sydney cruise ship terminal, which will allow the municipality to piggyback its dredging on the Provincial Energy Ventures work.
“Everything seems to keep moving in the positive direction,” he said.
Source: LocalXpress
