From oil to wind, Argentia makes about-face in energy industry with $65M deal

A port authority that's struggled first through plummeting oil prices and then a pandemic says it's scored a major deal for Newfoundland and Labrador one that inserts the provinceinto the global wind energy supply chain.

The geographically vast Port of Argentia, on the southwest coast of Newfoundland's Avalon Peninsula, had previously doubled down on its partnerships in the oil and gas sector. As recently as 2020, the authority was looking to expand its oil and gas services, appealing to petroleum companies eyeing Newfoundland's offshore.

But market volatility means that's no longer the case, says Scott Penney, the CEO who took over the operation just months after COVID-19 ground the port's operations to a halt.

Instead, he's looking to green energy to diversify the port's offerings.

"We chased the U.S. offshore wind market," he saidWednesday, describing the scramble to fill a void left by oil's uncertainty early in the pandemic.

"Our team really dug into what it was they were looking for, the opportunities, who some of the players were. And we started to make some cold calls."

$65M deal to create contracts, jobs

Importers, he said, paid attention to those calls when the port authority boasted its competitive advantages: a large dock, deep water and a 70-hectare paved runway close by.

"That was our diamond in the rough," Penney said.

The new $65-million deal, announced late Tuesday, will turn a vast swath of flat, seaside land beside Argentia's harbour into a storage facility for wind turbine parts.

The port will ship and receive what are known as "monopiles" steel cylinders that form the bases of massive wind turbines used in green energy farms across North America.

Ships from Europe will freight the parts to Argentia for offloading and storage, until U.S. ships pick them up to distribute along the eastern seaboard.

The deal means awarding numerous contracts to construction, security and operations companies, many of them local, Penney said.

It's the first monopile marshalling project in North America, and the port authority suspects it'll create 20 jobs in the region, with room to grow.

While the deal prevents Penney from disclosing the company handing over that cash, he believes the move will open the floodgates for future investments.

That will cause ripple effects for years across the region, says Placentia Mayor Keith Pearson: a major boon to local businesses.

"It's right in the shipping lanes," Pearson said Wednesday. "It's an ice-free port. The logistics of the land, the way it's laid out, it makes it just ideal for a lay down for windmills."

Argentia's proximity to the eastern seaboard, too, signals the potential for future growth.

"I can see that being a big thing in years to come," he said. "There's more people who will be looking to do storage and lay downs with regards to windmills. The Port of Argentia will probably reshape itself, reinventing itself probably, over the next three or four years."

"We've got a partner that's invested in our port now, significantly an international partner, and they are aggressively chasing more and more work and we're right alongside them," Penney said.

"We're going to be a major player and be here in Newfoundland doing it."

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