UPDATE 1-Ceres Global latest to build Canadian canola plant as oilseed demand spikes

(Updates with CEO interview)

WINNIPEG, Manitoba, May 25 (Reuters) - U.S. agriculture company Ceres Global Ag Corp said on Tuesday it will build a $350 million canola-crushing facility near the U.S.-Canadian border in Northgate, Saskatchewan, the latest project to capitalize on surging oilseed demand.

Canada is the biggest global producer and exporter of canola, a rapeseed variant that crushers process into vegetable oil and meal. Plans for North American refineries to produce renewable diesel, a clean-burning road fuel that can be made from canola oil, has added to interest in the crop.

Minneapolis-based Ceres said the facility will crush up to 1.1 million tonnes of canola annually and produce 500,000 tonnes of canola oil, for both food and fuel uses. It will open in 2024.

The Ceres plant will directly connect to BNSF Railway Co .

That will allow it a faster path than other Canadian facilities to ship canola oil to U.S. refiners and canola meal to California and New Mexico, where ranchers and feedlots feed it to cattle, Chief Executive Robert Day said in an interview.

Cargill Inc, Viterra Inc and Richardson International also announced plans this year to expand crushing in Saskatchewan, the largest Canadian canola-growing province.

Canola does not have U.S. Environmental Protection Agency approval for use as a feedstock in renewable diesel, although Day said he expects it to receive that designation before Ceres opens its plant.

With so much new crush capacity planned for Saskatchewan, processors are counting on farmers raising yields or expanding plantings to increase supply. Canola futures hit an all-time high this month.

Ceres’ plant will be far enough away from Saskatchewan competitors for it to source two-thirds of the plant’s canola from Canada, with the remaining one-third expected mainly from North Dakota, Day said. (Reporting by Rod Nickel in Winnipeg and Arunima Kumar in Bengaluru; Editing by Shailesh Kuber and Steve Orlofsky)