Winnipeg Free Press - PRINT EDITION

Port of Churchill eyed for mega-load shipment

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Officials at OmniTrax are pitching a concept to use the Port of Churchill as the entry point for oversized industrial equipment used in the Alberta tarsands.

Denver-based OmniTrax is trying to lay the groundwork that would establish Churchill and the Hudson Bay Railway to Flin Flon as an alternate shipping route for equipment made in Asia destined for northern Alberta.

Imperial Oil is trying to truck 200 massive loads from a river port in Idaho up to Fort McMurray.

Despite years of planning and significant investment by Imperial Oil in developing the highway route through Idaho and Montana, the shipments have been bogged down in legal challenges.

OmniTrax CEO Gary Long is not suggesting Churchill will alleviate current challenges for Imperial Oil but said he believes it could become a viable option in the future.

"This is a business development project for us right now," said Long. "We know the big focus of Imperial Oil right now is getting these mega-loads up from Idaho. But we understand because of the scope and the scale of the oilsands project that there is more coming."

Pius Rolheiser, a spokesman for Imperial Oil in Calgary, would not comment on whether the company would be interested in an alternate shipping route for the future.

He said that when they were planning to import the equipment from Korea -- which lands in Vancouver, Wash., travels by barge along the Columbia/Snake River system to Lewiston, Idaho, and then by truck to Fort McMurray -- Imperial chose the best existing route.

The problem is many of the 200 modules purchased from Korea that are essential for the development of the Kearl project are mammoth, oversized loads -- nine metres high, 7.3 metres wide and weighing about 226,000 kilograms each.

The first phase of the Kearl project, about 70 kilometres north of Fort McMurray, is expected to cost $8 billion to build. It will be underway by the end of 2012.

Although Imperial Oil lined up permits to allow the loads to legally travel across secondary highways in Idaho and Montana, concerned citizen and environmental groups have launched legal challenges that have significantly delayed the shipments.

Rolheiser said because of the delays, the company has started to dismantle some of the modules to break them down into a size small enough to move along the interstate highways.

Imperial Oil said it will likely spend about $100 million in Idaho and Montana during the course of moving the equipment, and Long said an all-Canadian route could provide substantial investment in Canada and could lead to improved road infrastructure in the northern Prairies.

Barry Prentice, a logistics expert at the University of Manitoba, said, "I think there is some merit to the idea of using Churchill as an import route for heavy, oversized equipment. Certainly the east-west distance gets shorter as you go north."

Long and others argue the shorter overland route -- about 300 kilometres shorter -- will more than compensate for the longer ocean route.

But Bob Dolyniuk of the Manitoba Trucking Association said he is not so certain that the roadways across northern Saskatchewan and Alberta would be able to accommodate such massive loads.

The Port of Churchill and the Hudson Bay Railway have relied on export shipments of Prairie grain for the bulk of their business.

With the demise of the Canadian Wheat Board looming in 2012, Long said OmniTrax will negotiate with the other grain companies to continue to ship out of Churchill.

But in the meantime, the company is trying to lay the groundwork for additional business models for the port-railway system.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition June 4, 2011 B10

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