Port of Virginia Signs Long-Term Lease for Virginia International Gateway Terminal

Rendering by Port of Virginia

The Port of Virginia signed a new long-term lease for the Virginia International Gateway terminal, which paves the way to expand capacity at the nation’s sixth- largest port by volume.

The lease will give the port authority oversight of and operating rights at the terminal until 2065 and is due to take effect Nov. 1.

Gov. Terry McAuliffe made the announcement Sept. 21, calling it a historic event for the port.

“This sends a very clear message — worldwide —  that the Port of Virginia is investing for the long term, and we will be able to service the vessels of any ocean carrier here at what will be one of the most modern and efficient container terminals in North America for decades to come,” he said in a statement.

RELATED: Port of Virginia reports $4.76 million profit in 2016

The deal clears the way for a multiphase plan to renovate and expand at Virginia International Gateway, as well as at Norfolk International Terminals. The port handled 2.5 million industry-standard 20-foot equivalent units, or TEUs, in 2015, according to the American Association of Port Authorities.

Virginia International Gateway is dredged to 55 feet. It can handle Neopanamax vessels and hold 600,000 containers. The terminal has eight ship-to-shore trains and 15 automated stacking cranes that work off computers. It also has an on-dock intermodal rail yard to load containers onto CSX or Norfolk Southern trains.

The project, which will cost $320 million, would double container capacity, expand rail operations, add four new automated cranes and extend the berth for vessels.

Virginia Port Authority expects the project to be completed in about three years.

“Within the existing footprint, we will have the capability and capacity to process a total of 1.2 million [container] lifts — 2 million TEUs — annually through VIG,” state Secretary of Transportation Aubrey Layne said.

In August, McAuliffe announced $350 million in state funding to expand capacity at Norfolk International Terminals, which would increase capacity from 820,000 containers to 1.2 million and replace manual stacking cranes with 15 automated ones.

“We are seeing vessels in the 10,000-plus TEU range, we are processing more rail cargo than ever, and the demand for our services is growing," Virginia Port Authority CEO John Reinhart said. "We have momentum, and our timing coincides well with the changes in the industry,”

Gov announces $321M investment in @PortofVirginia to double capacity at the deep-water container terminal in 3 yrs #NewVAEconomy pic.twitter.com/aVkJfviIhk — Terry McAuliffe (@GovernorVA) September 21, 2016

Said John Milliken, chairman of the port authority’s board of commissioners: "With [the] announcement, we have set our growth path for the next 20 years and built a bridge to our long-term future, which is a terminal on Craney Island."

The new terminal, if it were funded, would be able to handle 2.87 million containers and place up to 45% of the cargo onto intermodal rail.