The Columbian | Serving Clark County, Washington

Both of its mobile harbor cranes would be needed for massive components

A South Korean manufacturer of massive oil refinery components has chosen the Port of Vancouver as its first stop along a new shipping route through the United States to the Canadian oil sands, port officials revealed Tuesday.

The port, citing a confidentiality agreement, declined to name the company until it signs a final contract sometime in the first quarter. But the company’s 156-ton modules would be an entirely new cargo for the port that could generate new revenue as well as more work for Columbia River bar pilots, longshoremen, truckers and others involved in shipping, said Alastair Smith, port director of marketing and operations.

That’s good news for the port, which saw total cargo tonnage fall this year below 2006 levels as a result of the global recession. Marine terminal operations are expected to bring in about $9.8 million in 2010, according to budget estimates.

“It creates jobs and money for Vancouver,” said Bart Phillips, president of the Columbia River Economic Development Council.

The port declined to provide the specific estimated revenue or number of modules the new contract would secure, out of competitive concerns that its dockage and cargo handling bid could be undercut.

Smith did say, however, that both of the port’s mobile harbor cranes were required to lift the first 156-ton module, which came to the port this summer as a test for future shipments expected to start in August. By comparison, only one crane is needed to off-load wind energy components, one of the fastest-growing revenue sources for the port since it bought its first mobile harbor crane in 2006.

At a billing rate of $13,100 just to start the cranes and operate them for four hours, plus $700 per hour after that, the potential income to the port could be significant depending on the terms of the contract, said Smith. The company may also use cranes aboard its own ships to move the cargo on and off.

The manufacturer has been shipping its modules through a Texas Gulf port and sending them north by truck to Alberta. But due to the height limitations for cargo that passes under bridges on the interstate highway system, the modules needed to be roughly half the size they could be if they’re shipped through Vancouver and barged northward along the Columbia River system, explained Smith.

Foreign Trade Zone

To sweeten the deal with the Korean manufacturer and to better serve its wind energy component customers, the port commission decided Tuesday to push ahead with an application to establish a general Foreign Trade Zone with the International Trade Administration.

The designation, which would cost about $100,000 to obtain, would establish the port as a duty-free area for companies that store or alter imported components before they officially enter the U.S. through customs.

The ports of Portland, Seattle and Tacoma as well as Cowlitz County all have established foreign trade zones to spur economic development. And the Port of Vancouver has previously considered applying for the status several times, but the amount of affected cargo was too low to justify the cost, Smith said.

The port will complete an economic justification and feasibility study to determine whether income from the wind components and the new refinery modules will justify the expense of the application. The port could also apply for a sub-zone through Cowlitz County if it determines its own zone isn’t feasible.

The zone could help attract more international trade to Vancouver. As companies looking for new locations weigh the benefits, the trade zone would add to the list of other port features, including proximity to Interstate 5 and Portland International Airport and direct rail access, said Ocean Yuan, president of Grape Solar, formerly Centron Solar, a startup Chinese solar panel manufacturer with operations in Eugene, Ore.

Grape Solar, which is eyeing Vancouver port commercial space for a new solar panel assembly plant, would pay a 2.5 percent import duty for its solar silicon chips. A duty-free zone could mean large potential cost savings, Yuan said.

“That would be beneficial for the solar industry,” he said.

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