Crown corporation British Columbia Railway Co. has awarded a 40-year lease to Kinder Morgan Energy Partners LP to operate Vancouver Wharves, a bulk marine terminal in North Vancouver that badly needs revitalization.
Kinder Morgan is also acquiring terminal assets that include railway infrastructure, dry bulk and liquid storage and material handling systems, the companies said yesterday. Financial details of the deals were not disclosed in two separate releases.
The Vancouver Wharves operation, at the entrance to the Port of Vancouver, consists of five vessel berths on a 56-hectare site. The terminal can handle more than 3.5 million tonnes of cargo annually.
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Vancouver Wharves also has access to three major rail carriers connecting to shippers in Western and Central Canada, and the U.S. Pacific Northwest.
"This agreement will bring new investment and opportunities to Vancouver Wharves and its customers, and will secure its future as an integral port facility for British Columbia," said Kevin Mahoney, chief executive officer of B.C. Rail.
"After a rigorous selection process that included input from many of our customers, employees and other key stakeholders, [B.C. Rail]has chosen to enter into a long-term lease agreement with Kinder Morgan that will bring real benefits to our customers, our employees, our community and our province."
The transaction is expected to close in the second quarter of 2007.
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"Vancouver Wharves has a strong existing customer base and an excellent location in the Port of Vancouver, and we are excited about the significant growth and expansion opportunities this acquisition provides Kinder Morgan in the Canadian market," KMP Terminals president Jeff Armstrong said in a release.
"We also feel these assets align well with our growing network of terminals and broaden the services we can provide to our customers -- particularly related to the growing Canadian oil sands production."
Vancouver Wharves handles four primary commodity groups: mineral concentrates, pulp, agri-products and sulphur.
Kinder Morgan Energy Partners is one of the largest publicly traded pipeline limited partnerships in the United States.
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It owns an interest in or operates about 42,000 kilometres of pipelines and more than 150 terminals. It is also the leading provider of carbon dioxide for enhanced oil recovery projects in North America.
The general partner of the venture is owned by Kinder Morgan Inc., one of the largest energy transportation, storage and distribution companies in North America.
Kinder Morgan agreed this year to sell Terasen Inc., a natural gas company in British Columbia, to Fortis Inc.