A new grain terminal being built by US agri giant Cargill and Ukraine’s MV Cargo at the Black Sea port of Yuzhni is expected to be completed by spring 2018.

Cargill and MV Cargo signed a share purchase agreement on 24 February, legally committing the two companies to building the US$100M terminal.

This follows a memorandum of cooperation signed with Ukraine’s Sea Ports Authority (USPA) on 13 August 2015, when the port authority agreed to dredge the water area adjacent to the terminal down to 16m.

“This will enable the new terminal to handle large vessels with a deadweight of up to 100,000 tonnes,” Cargill said in a statement.

Near Ukraine's biggest port city of Odessa, the terminal will have a loading capacity of 5M tonnes/year of grain and other commodities, said Ukrainian infrastructure minister Andriy Pivovarsky said in a Reuters report.

The joint venture would operate the terminal and Cargill would be a major customer, but the facility would also be open to third parties, the report said.

Ukraine was currently able to ship about 35M tonnes of grain from its sea ports but the government would like to double export loading capacity within the next five years, Reuters said.

Andreas Rickmers, head of Cargill’s grains and oilseeds business in Europe, said: “Through this investment, Ukraine’s port infrastructure will be expanded and will provide greater efficiencies to connect Ukraine’s surplus agricultural crops with the parts of the world demanding more food. This new port will benefit Ukrainian farmers, the overall economy and global food security. It will add to our footprint of port facilities in the Black Sea region and confirms our intention to keep investing in Ukraine’s agricultural sector.”

Odessa-based MV Cargo said the company expected the project to generate over UAH 300M (US$11.45M0 in tax payments annually and to create employment for around 350 people.