Dubai’s DP World unveiled a deal backing potential development of Canada’s port of Churchill, a northern outpost that Prime Minister Mark Carney aims to expand for exports to Europe and other markets.

The global port operator has negotiated a memorandum of understanding with two Canadian entities, including Arctic Gateway Group, the owner and operator of the Churchill port and an associated railway, it said in a statement, confirming an earlier report by Bloomberg News.

The agreement focuses on port operations and a possible transportation corridor to link Churchill with DP World’s global logistics network and inland port facilities managed by CentrePort Canada Inc.

Churchill is a remote town in the north of the Canadian province of Manitoba. It sits on Hudson Bay, which connects to the Atlantic Ocean via Arctic waterways. Its location means it could someday become a gateway to ship Canadian resources like liquefied natural gas, grain, potash and other critical minerals to customers in the Middle East and Europe.

But doing all of that would take tens of billions of dollars of investment. 

Canada and the United Arab Emirates have been developing closer economic ties since Carney came to office last year, with an agenda to build his country’s trade and investment connections with the rest of the world after U.S. President Donald Trump started a trade war.

Sheikh Khaled bin Mohamed Al Nahyan, the Crown Prince of Abu Dhabi, is scheduled to visit Ottawa on October 26 and 27 Carney’s office announced on October 25. Last year, the UAE committed to invest C$70 billion ($49.9 billion) in Canada.

“At a time of profound global transformation, Canada and the UAE are working to deepen their partnership and build greater economic strength, shared security, and long-term prosperity for people in both countries,” Carney’s office said.

Canadian Energy Minister Tim Hodgson told Bloomberg News last year that Churchill has “tremendous potential” as a much larger export hub. The bay is currently frozen for most of the year, but Hodgson said it could be opened up for extended shipping seasons with icebreakers. Canada signed a deal for new ice-breaking ships in August.

Discussions about the port advanced during September meetings between UAE officials and Manitoba Premier Wab Kinew during the Canada Investment Summit in Toronto in mid-September.

A prospectus shared by Canada’s government with summit attendees put the price tag of a major expansion of Churchill and supporting infrastructure at $57 billion, with “preliminary investment requests” of $3.9 billion. That pitchbook said the initiative is to turn Churchill “into a four-season trade gateway through an LNG export corridor, rail upgrades, port modernization, and develop all-weather road access.”

DP World already has extensive interests in Canada. It operates a large terminal at the country’s biggest port in Vancouver, a container port in Prince Rupert, also on Canada’s west coast, and last year won the contract to operate a new terminal near Montreal.

One of Canada’s largest pension funds, the Caisse de Dépôt et Placement du Québec, is a large equity investor in DP World’s Canadian unit.

Chris Avery, Chief Executive Officer of Arctic Gateway Group, said Churchill could also become a node for goods to avoid bottlenecks in the Middle East between Asia and Europe, if they traveled the other way around the world through Canada.

“Imagine a container either going through Prince Rupert or Vancouver, both of which DP World has operations in, and connecting inter-modally, and a container effectively getting on a train and then quickly moving over to Churchill and then, from Churchill, directly to European markets,” he said in a phone interview.

“We believe that the timing is actually comparable to going through the Red Sea and the Suez Canal. And then certainly with the conflict in the Middle East, at times, and the instability of the Strait of Hormuz and the Strait of Bab al-Mandeb, and other tension in the region, Canada can be a trusted and reliable trade hub for trade traffic between Asia and Europe.”