November 29, 2022 [Reuters] – PROGRESS on a proposed export terminal at GeelongPort is advancing, with landowner Midway Limited confirming it is in final contract negotiations with multiple parties to operate the site.
The woodchip business currently uses the Geelong site, located a Corio Quay North, to process and export plantation hardwood and native hardwood fibre.
Midway has identified a parcel within the company’s 19-hectare footprint as an ideal site for a grain storage and handling facility.
The terminal will also utilise part of the dedicated capacity at the Berth 4 ship-loader.
It has been advancing this plan for several years, even noting in the Full Year 2021 financial results that the terminal had a targeted completion date of October 2022.
While Midway has not named the possible stakeholders, in a November statement the company suggested it had “strong interest… from large Australian bulk grain export market participants”.
Midway managing director and chief executive officer Tony McKenna said he was confident a deal will be finalised between the parties.
“We are and continue to make good progress on the negotiations,” Mr McKenna said during Midway’s annual general meeting on Monday.
“These are multi-party negotiations and it takes time to bring all the parties together.
“I am confident that we will get there, but there is still some work to do.
“I am hopeful of having something announced in the coming months.
“The logic behind it is very strong and every party should benefit from it, so I do believe we will get there.”
Mr McKenna has indicated the new terminal could cost about $15 million to construct.
Last year, Midway flagged it was moving the project forward.
This include engaging with the Australian Competition and Consumer Commission (ACCC) as part of the mandatory Port Terminal Access (Bulk Wheat) Code of Conduct and talking to GeelongPort about possible shiploader modifications.
The company also suggested that “design and development of civil engineering for foundations” were under way.
An artist’s impression of the proposed grain export terminal released in mid-2021. Photo: Midway
Possible project scale
Since 2020, Midway has released several pieces of information about the possible design and scope of the grain terminal.
In August last year, the company said the project would be progressed in two stages, with the first phase including the signing of commercial agreements and the second involving the construction of 35,000-tonne storage and terminal facility.
The Geelong Advertiser also reported in August 2021 that the proposed facility would have the capacity to move up to 300,000t of grain per season.
However, this could change depending on the plans of other parties, which Midway has suggested could be either in the form of a joint-venture partner or a facility lessee.
Earlier Bunge proposal
Midway’s possible development is not the first grain terminal to be proposed at the GeelongPort site.
Global agriculture and food company Bunge in 2014 announced plans to construct a grain export terminal at the Midway site.
The project was to feature a grain receival site and three storage silos, and have the capacity to export 450,000t of grain per year.
Bunge sent the plans to the City of Greater Geelong, which were later amended in 2015.
Geelong is already home to one of GrainCorp’s two Victorian terminals, the other being at Portland, and since 2017, Riordan Grain Services has been using mobile shiploaders to export grain from public berths at Geelong and Portland.
Victoria’s only other bulk grain terminal is the LDC-owned Emerald facility in Melbourne.
GeelongPort is Victoria’s second largest port and handles close to 12 million tonnes of cargo and more than 600 vessel visits each year.
GeelongPort sale
The sale of GeelongPort on November 20 to investment firm, Stonepeak, and industry super fund, Spirit Super, could also provide added certainty for Midway’s grain-terminal proposal.
Although GeelongPort would not be directly involved in the terminal’s operations, the organisation would need to sign an agreement with Midway to allow the new facility to use the berth.
The sale agreement comes after the ACCC in March flagged preliminary competition concerns about the proposed acquisition of GeelongPort by the Spirit Super Palisade Consortium.
In a statement ACCC said the proposed acquisition would lead to minority common ownership between the Port of Geelong and Port of Portland.
“The Consortium includes Spirit Superannuation, Commonwealth Superannuation Corporation (CSC) and the Diversified Infrastructure Fund managed by Palisade Investment Partners (Palisade),” the statement said.
“Investors managed by Palisade also wholly own and operate the Port of Portland, a bulk commodity port in south‑west Victoria.
“Post‑acquisition, Palisade would manage a 100 per cent interest in the Port of Portland and a 49pc interest in the Port of Geelong.”
Following this announcement, the consortium pulled itis application to the ACCC and its interest in GeelongPort.
This cleared the way for the Spirit Super and Stonepeak partnership to purchase the port facility.
Stonepeak senior managing director Darren Keogh said the partnership was looking forward to engaging with GeelongPort operators and exploring possible growth opportunities.
“It is a highly contracted entity with strong barriers to entry and stable and predictable demand drivers, which we believe are even more compelling when coupled with the port’s meaningful opportunities for long-term growth through additional development to meet future import-export demand in the region,” Mr Keogh said in a statement.
“We look forward to working closely with the GeelongPort team to help further their objectives and invest behind this integral component of the Victorian economy.”
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