Savage CANAC Corporation made a presentation to Northern Sunrise County council at their regular meeting on May 14 outlining a proposed diversification of the Savage facility in Reno.
The Northern Sunrise Crude Terminal provides direct access to the CN railroad, and has the infrastructure for rail car switching, railcar spotting, and transload service (direct truck to rail).
“Savage CANAC has enjoyed a fantastic relationship with the county since 2013 when the project first began,” said Savage sales manager Curtis Shuck. “Originally it was developed to handle and transload crude oil and that project continued for a while.”
“We feel after review there are many opportunities that are before this facility and can really be used as an asset,” Shuck told council.
“Certainly located in the heart of Seal Lake, obviously the Savage facility in Northern Sunrise was based on and rooted in the oil and gas support side, we don’t see that changing, in fact as we have been working with county administration and staff it’s really been a discussion of ‘adding on to that crude oil designation, not take it away but add on.”
Shuck pointed out Savage had invested approximately $17 million in the facility’s infrastructure. The facility was designed for the potential addition of pumps, meters, and small tanks for more efficient loading.
Savage hopes to add a tank farm to the facility as part of its long- planned goals to serve oil and gas needs.
“We still feel that there are opportunities, we’re working with several of the producers here now, as those spreads and as those prices are increasing there is an opportunity for more crude oil to be moved through facility,” Shuck said.
“However, with that said, there are other opportunities that present themselves as well, and we want to take in the opportunity to benefit from that investment that has been made at this facility and the partnership with Northern Sunrise County.”
Shuck said Savage had over 13,000 feet of track in place that has been inspected by CN and found to be in excellent shape, and 13 transload racks that are ready to go.
“One of the things that CN has been very vocal about is really looking at how do we benefit this region by larger train movements. Again as you know it takes quite an effort to get out of Edmonton so they want to make sure that as they’re running those trains that they are creating as much value as they possibly can, that’s where this discussion about kind of a regional centre starts to make sense and the investment that has been placed here is critical in that regard.”
Some new uses for the facility could include moving agricultural bulks, mineral bulks, forest products, and liquid bulks.
The bridge construction project in Peace River has also created a new opportunity to bring in project cargo via rail. Savage is working with partners at Flatiron AECON to bring in bridge girders from Quebec.
“One of the challenges we face is the logistical link between the fabrication facility in Quebec and the project we have in the Town of Peace River,” Shane McCarthy, project manager for Flatiron AECON joint venture, told council.
“There’s 85 girders, and they range in various heights but upwards of 4.8 meters tall, so they are long tall slender items and we’ve identified that rail transport for as much as possible is the safest opportunity to bring the units to site while maintaining their integrity without exposing ourselves to risky routes,” McCarthy said.
“The plan will be if we can get the approvals we are requesting to bring the units to Savage’s facility, transload them, store them for a while and then take them by road from the facility to the bridge site,” he said.
McCarthy said the girders will take three weeks to arrive by rail, and then will be moved in convoys of five per week.
The first convoy is hoped to leave at the end of June or beginning of July so should arrive in the area before the end of July.
The girders will be the main superstructure that will span the piers in the river, and then a concrete deck will be put on top.
“So one of the things that important in opening up a high wide corridor or project cargo corridor like this, as Shane mentioned because of the dimension of these moves that they have to run a special clearance from origin to destination,” Shuck said.
“Now what’s important about that is what that does for this facility into the future as well is one of the programs that we’ve identified that are potentials for this region are the development of wind energy resources, and as we’re looking at that the designation of these high wide corridors become very important.”
Shuck said he had personally worked with the port of Vancouver Washington for 10 years in the development of wind by rail for several of the offshore and domestic manufacturers.
“There are three things that this opportunity brings for all of us. Number one is diversification, and that’s our ability to be more than just crude oil centric. It opens up an opportunity to create more of a steady volume across many business sectors, what’s important there is that also allows us to provide a more stable employment base. So instead of being sort of at the whims of the market, by having a diverse business structure we are able to manage our way through various oil products, agricultural products, mineral products, and oil and gas so we maintain that stable market,” Shuck said.
“The next is optimization. One of the things that’s super critical in the business of logistics is the ability to optimize and really look at how we create a benefit at the lowest landed cost. And with that also comes an opportunity for us to look at the overall region and how we do things like take trucks off the road. It’s a huge safety concern, it’s a huge impact to the existing environment, so how does that work and how does a regional facility like this contribute to overall economic health and benefit of the region.”
“And lastly is the sustainability factor, and we don’t ever want to take a dim view of that, because again one of the factors we use in freight rail is we can move a single ton of freight over 400 miles on one gallon of diesel, and I think that’s important as we’re trying to be good steward in terms of how we move freight in and out of our communities,” Shuck concluded.
“Council will probably agree with me we look forward to industry moving forward through economics as well as environmentally,” Reeve Carolyn Kolebeba said.
“It’s great to see we have additional uses being sought for an existing site,” said councillor Audrey Gall. “I’m happy to see you’re looking at potential for expansion.”
After the presentation, Northern Sunrise County Council gave first reading to Bylaw B353/19, which would amend Bylaw B275/15 to add Industrial, Light Manufacturing and Processing and Industrial, Heavy Manufacturing and Processing as discretionary uses within the Crude Oil Storage District. If approved, the new by-law will allow Savage to diversify according to the plans they outlined to council in their presentation.
A public hearing on the new by-law will be held in council chambers on June 11, 2019 at 10:00 a.m. A representative of CN Rail will be attending the hearing.