MELBOURNE (Reuters) -BHP Group expects to present its board with a decision on whether to proceed with its Jansen potash project in Canada in a few months' time – rather than mid-year – after choosing between two port options, an executive said on Thursday.

The world's biggest miner has estimated the project in Saskatchewan province would cost up to $5.7 billion in its first phase. The project offers diversification into agriculture markets given that potash is a key element in plant nutrition that also makes crops more drought resistant.

"We are considering two options in terms of the port. One is a commercial option at the port of Vancouver, one is a greenfield option," said Ragnar Udd, president of BHP's Minerals America.

"We would like to have those locked in before we take them to the board," he said.

"We continue to expect that this (decision) will occur in the next, coming few months."

The miner expects the project will take five years to develop and have an annual production capacity of around 4.4 million tonnes of potash in its first phase. It will have capacity for an additional 12 million tonnes in stages thereafter for a life of 100 years.

Udd was speaking to investors about the outlook for the potash market, for which BHP expects demand to catch up with supply by late this decade or early next.

BHP estimated global production of potash was 76 million tonnes (Mt) in 2020, which could rise to 86 Mt when factoring in latent capacity.

It expects demand to grow by 15 Mt to around 105 Mt by 2040 or 1.5% to 3% a year, along with the global population and pressure to improve farming yields given limited land supply.

BHP sees operational expenditure at the Jansen potash mine at $100 per tonne and sustaining capital expenditure at $15 per tonne. It sees incentive pricing for new projects at $300 to $500 a tonne, with Canada the main supplier.

(Reporting by Melanie Burton; Editing by Richard Pullin and Christopher Cushing)