Plans to resume ferry service between Portland and Nova Scotia are moving full-speed ahead with a Maine-based company at the helm.

Canadian officials have decided to negotiate with STM Quest Inc., a joint venture by Eliot-based Quest Navigation Inc. and two other firms, on setting up and operating ferry service to and from Yarmouth, Nova Scotia.

If the negotiations are successful, the service would begin in 2014. A previous ferry service between Portland and Yarmouth was discontinued in 2009.

Tuesday’s announcement was welcome news for Portland waterfront business owners, tour operators and New England residents with personal or business connections to Yarmouth, which is about 200 miles east of Portland.

The STM Quest partnership, which also includes Miami-based International Shipping Partners Inc. and Singapore-based ST Marine Ltd., now must negotiate with Nova Scotia economic development officials over matters such as terms of the province’s financial support for STM Quest. The goal is to wrap up those negotiations before Sept. 1.

Canadian officials have pledged to subsidize the ferry service at $3 million a year for seven years.

But there are other issues to work out, such as the amount of marketing assistance the province would provide, and how much help STM Quest would receive in preparing its terminals in Yarmouth and Portland for business, said Jeff Monroe, Portland’s former port director and a consultant to ferry services.

For instance, Monroe said, the berth in Yarmouth would have to be dredged and the terminal cleaned up, since it has not been used for any purpose since 2011. “That terminal has been abandoned and isolated for two years,” he said.

To make the ferry service a viable business, STM Quest will have to establish strong partnerships with tour operators, Amtrak and other relevant companies while aggressively marketing its service to the public, Monroe said. The journey between Nova Scotia and Portland would be about 12 hours.

“Marketing and business development will be a big part of making this work,” he said.

Gov. Paul LePage has committed to using a portion of the state’s marketing budget to promote the ferry service – on the ST Marine-built Nova Star cruise ferry – and to help the company obtain a $5 million operating line of credit.

“Since 2009, Nova Scotia and Maine have missed a critical link between our citizens and economies,” LePage said Tuesday in a written statement. “On behalf of the people of Maine, we would welcome restoration of this vital service and economic driver.”

The previous ferry operator, Bay Ferries Ltd., discontinued service between Yarmouth and Portland in 2009, citing a reduction in passenger traffic caused in part by a change in U.S. passport rules.

At its peak in the late 1990s, annual ferry ridership ranged from 100,000 to 150,000. In 2009, it had dropped to 76,000.

At the time, many business owners on the Portland waterfront lamented the loss of ferry service to Nova Scotia.

Steve DiMillo, owner of DiMillo’s on the Water restaurant, said Tuesday that he was happy that the plan to resume ferry service was moving forward.

“To see that come to fruition is just really good news,” he said. “Obviously, a transportation hub is beneficial to all the businesses down here.”

New Englanders who once rode the ferry to visit friends and family or do business in Nova Scotia also said they were pleased to hear that negotiations were moving ahead.

“Hooray, hooray, hooray,” said Middletown, R.I., resident Denise Doucette via email. “We’ve been waiting five long years for another Maine/Nova Scotia ferry.”

Although the Bay Ferries service has only been off line for four years, the 1,215-passenger, 300-vehicle Nova Star would not start its runs until summer 2014, for a total of five years without ferry service.

Mark Amundsen, president and CEO of Quest Navigation, said his company was honored to be chosen for the ferry initiative. Two other companies, P&O Ferries of England and Balearia Caribbean Ltd. of Miami, also had bid for the job.

“We are pleased to be invited to negotiate the terms for a mutually beneficial agreement with the province of Nova Scotia,” Amundsen said in a written statement. “We look forward to launching the Nova Star Cruises ferry service beginning in 2014, and we are committed to providing a world-class cruise ferry service for generations to come.”

No specifics were given as to what the service would cost.

Graham Steele, Nova Scotia’s economic and rural development and tourism minister, said Tuesday in a news release that “we’ve said all along that the province would support a ferry with the right business model and the right partners. We are very close to having a ferry service that will stand on its own, a service that can be successful and profitable, that families of Southwest Nova Scotia can count on well into the future.”

The process of selecting a potential ferry operator allowed an evaluation team to communicate with the companies, request more information, ask questions about the plans they submitted and meet with each of them, Canadian officials said.

They said a team of representatives from the Nova Scotia International Ferry Partnership and the province evaluated the three bidders’ proposals based on financial stability, management structure, expertise, and a history of managing successful ferry services, as well as tourism and marketing experience.

The Nova Star, built in Singapore, is a conventional cruise ferry with 162 cabins, two restaurants and a maximum capacity of 1,215 passengers. At 528 feet, the ship is more than 50 feet longer than the Scotia Prince, the cruise ferry that operated between Portland and Yarmouth from 1982 to 2004.

The high-speed Bay Ferries catamaran The Cat, which took over the route in 2005, was a smaller and faster vessel. But it consumed far more fuel than a conventional ferry, and the fuel costs and dropoff in riders led to the suspension of service four years ago.

J. Craig Anderson can be contacted at 791-6390 or at [email protected]

Twitter: @jcraiganderson


Correction: This story was revised at 10:42 a.m., Aug. 14, 2013, to state that the berth in Yarmouth would have to be dredged and the terminal cleaned up, according to Jeff Monroe, Portland’s former port director and a consultant to ferry services.