The Port of Virginia signed a new, long-term lease for Virginia International Gateway (VIG) earlier this week that clears the way for the port to begin work on doubling capacity at the deep-water container terminal.

The new lease, which was negotiated over a two-year period, will give the port operating rights at the terminal until 2065. The lease also allows the port to begin work on a $320 million project to build the terminal’s second phase, for which construction will begin this year.

The lease is between the Virginia Port Authority (VPA) and Virginia International Gateway Inc., which is owned by Alinda Capital Partners and Universities Superannuation Scheme (USS). The lease is scheduled to go into effect November 1.

“This new lease helps to put the port on the path to long-term sustainability which, in turn, will result in continued job creation, investment and revenue for the commonwealth,” said Virginia Governor Terry R. McAuliffe. “Further, 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.”

Within its existing footprint, the port of Virginia will have the capacity to process 1.2 million container lifts, the equivalent of two-million TEU, annually through VIG, noted Aubrey L. Layne, Virginia’s secretary of transportation. “The negotiation process was a collaborative effort with both the Alinda, USS team and the port making a significant investment in resources and time,” said Layne. “Everyone worked together to reach this agreement knowing the long-term benefits to the port and throughout Virginia.”

Presently, VIG is processing 600,000 container lifts annually. The expansion will take an estimated three years to complete and result in a longer berth, an expanded rail operation, an expanded container yard and four new ship-to-shore cranes.

“The potential economic impacts of the build-out are significant,” said John G. Milliken, chairman of the VPA Board of Commissioners. “We anticipate this project creating thousands of new port-related jobs and generating hundreds of millions in state and local taxes and billions of spending and investment throughout the state.”

In August, McAuliffe announced $350 million in state funding to expand capacity at Norfolk International Terminals (NIT), which is the port’s other primary container terminal. The port is also nearing the midway point on construction of the North Gate complex at NIT, a 26-lane gate that will provide greater motor carrier access to the terminal and will tie into the I-564 connector, also under construction.

“We believe that the continued investment in people, technology, and those capacity projects being undertaken here during the next three-to-four years are positioning the Port of Virginia to become the east coast’s premiere port,” said John F. Reinhart, CEO and executive director of the VPA. “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.”