Commissioners: $3.9 Million Crane Will Boost Port’s Competitive Edge

By Erik Olson, May 5, 2013, Longview Daily News

Port of Longview commissioners agreed to buy a second mobile harbor crane, a purchase that port officials say could help them better compete to unload imported oil refinery equipment needed for a Midwest oil boom.

Port officials say they are choosing between two used 481-ton Liebherr-brand cranes in Rotterdam, Netherlands, which are for sale at 3 million euros (about $3.9 million). Port commissioners approved a $1.5 million down payment at their Friday business meeting, and they plan to secure commercial loans to cover the rest.

“It gives us another tool in our tool belt to attract more cargo. It gives us … more flexibility,” Doug Averett, the port’s director of operations, said Friday.

The port bought its first Liebherr crane in 2008 for $4.7 million to unload large wind-energy equipment imports, which had started booming. Port officials say they lost out on some of that business to the Port of Vancouver, however, because they only had one crane, which meant it took longer to unload the equipment (the Port of Vancouver has two mobile harbor cranes).

In addition to boosting wind-energy equipment imports, port officials say they need a second crane to be considered to import large refinery parts from South Korea. With oil extraction booming in the Bakken formation in North Dakota, port officials say they expect long-term demand for equipment to build new refineries.

The Bakken formation, centered around Williston, N.D., and stretching into eastern Montana, is the largest continuous oil reserve in the continental United States, according to the U.S. Geological Survey. The estimated amount of oil ranges from 50 billion to 500 billion barrels, and most analysts believe the supply could last for decades.

The surge in drilling has created an economic boom for North Dakota and a demand for more refinery capacity. Most of those refinery parts are expected to be imported from Asian manufacturers through West Coast ports.

“For us to even be in the running for that, you need to have a second crane,” Port CEO Geir Kalhagen said.

The cranes under consideration are the same model and year as the port’s current crane, and they’ve logged roughly the same amount of hours. Commissioners also authorized Kalhagen to spend an additional 300,000 euros (about $393,000) on additional equipment, including a bucket to hoist the cargo. Once the sale is finalized, the crane will arrive in parts in four to six weeks and be assembled in Longview.

Unlike the last purchase of a mobile harbor crane, port officials aren’t selling bonds to finance the deal. They said commercial loans give them more flexibility to pay the money within five years or sooner with revenue created from using the second crane.

“It’s a new step for the port,” Commissioner Darold Dietz said.

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