Wade Dawe calls it a “win-win-win” deal.
That’s how the president of Torrent Capital Ltd. sums up the deal between the Nova Scotia based company and the Port of Argentia in Newfoundland, creating the joint venture company Argentia Capital Inc. (ACI).
The deal was announced in a Sept. 21 news release from the Port of Argentia.
Port officials say the new joint venture will focus on construction of port infrastructure, and provision of services and equity ownership in businesses that support aquaculture, renewable energy and oil and gas sectors, as well as other developments.
Port CEO Scott Penney could not be reached for comment, but in the news release noted the port “is in the middle of a remarkable transformation to become a hub for innovation across multiple sustainable industries.”
Dawe won’t say how much money Torrent is investing in the joint venture, suggesting only “it’s significant.”
Ultimately, he said, the deal — which was crafted after 19 months of discussion —“was structured with all of the stakeholders in mind.
“The intent was to do a win-win-win business arrangement. A win for the region, for the port and for Torrent and we believe we’ve found the sweet spot,” Dawe told SaltWire.
When it comes to sweet spots, the Port of Argentia certainly seems to have geography going for it.
The former U.S. naval base is an ice-free, deep-water port, located on 10,000 acres of land alongside a busy shipping lane between Europe and America.
And it’s been generating lots of headlines in the past few months.
Earlier this year work resumed on the construction of a concrete platform for Cenovus Energy’s West White Rose offshore oil field, a project that had been put on hiatus in 2020 as the world shut down and oil prices plunged due to COVID.
Meanwhile, the port authority has been eyeing the potential in green energy projects.
Earlier this year the port signed an option to lease agreement with Pattern Energy, a global company that constructs and operates wind, solar, transmission and energy storage systems around the world.
The deal with Pattern could see work at Argentia involving components for wind and hydrogen projects.
Just last month the port signed a contract with a German company that will be constructing wind farm components for an American wind project. The port will be a holding area for monopiles — the huge legs that hold up wind turbines. According to port officials, that deal will generate about $65 million in work associated with contracts for land preparation, stevedoring, heavy ground transport, security and other services.
Optimistic officials
Officials for the port authority are optimistic that the next five years bring other projects to this industrial site, with investments from renewable energy companies proposing to establish facilities to produce wind energy, hydrogen and ammonia, as well as staging for offshore wind farm construction projects throughout North America.
Other promising areas for growth include the requirement for subsea pipe fabrication, container service expansion, aquaculture support services and facilities for critical mineral processing.
To accommodate projects like that, however, the port will need to be able to provide more infrastructure — things like fabrication buildings, accommodations for workers — and services.
That’s where Torrent comes in.
Dawe explained Torrent, a publicly traded company (TSX: TORR), will provide finance, business expertise and advice, and “we will share the ownership of the new infrastructure and the new facilities that are to be built.”
Right now there’s no formal plan on what will be built, when and the cost of building.
He did say, however, that the projects to be accommodated at the Port of Argentia are megaprojects “that will collectively employ hundreds, and possibly thousands, of workers and they’re going to need all sorts of services and infrastructure to accommodate their work.
“We’ve set up this business to identify what those needs are going to be. We will work with the port and consult with the various projects that are going to be locating in Argentia. Then we will enter into business arrangements with those projects in order to provide the infrastructure and services they need to be able to locate at the port,” he said.
Board of directors announced
The board of directors for Argentia Capital Inc. was also announced Sept. 21.
In addition to Torrent president Dawe and Port CEO Penney, the board includes businessman and former Newfoundland and Labrador premier Dwight Ball, and Torrent director Carl Sheppard.
Sheppard, in fact, is credited with helping give birth to the deal by introducing Torrent to the Port of Argentia.
“He’s done work for my group and for the port for a number of years,” explained Dawe, “and he brought the parties together.”
Once Torrent got talking to the port authority, added Dawe, they realized there was a business need.
“Together we put together the structure, then presented it to the board of the port authority and the board at Torrent and realized there was a win-win situation here for all parties,” he said.
“That’s how Argentia Capital was formed.”
It’s Torrent’s first major significant investment in Newfoundland, Dawe said, adding he’s been involved in the finance industry for 25 years and has done $2 billion worth of deals in that time.
Dawe said he’s “very excited” about this opportunity.
Noting it’s a multi-year, and possibly a multi-decade, deal, Dawe said, “I believe it will transform the port (and) in five years’ time the port of Argentia will have a substantial amount of infrastructure and much higher employee count and a lot more happening as a result of this partnership.”
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