RTI sale could garner $2-billion, official says

The sale of Canadian government-owned Ridley Terminals, the coal export facility in Prince Rupert, might fetch as much as C$2 billion.

~ By Andrew Moore,

Platts, www.platts.com

The sale of Canadian government-owned Ridley Terminals, the coal export facility in Prince Rupert, British Columbia, might fetch as much as C$2 billion dollars (US$1.96 billion), according to an impromptu analysis shared Thursday by a terminal official.

Matt LaFiandra, a senior project manager for the terminal, made the comments during a presentation at Coaltrans West Coast conference in Las Vegas, Nevada.

LaFiandra said that while he does not have access to information about much of the ongoing sales process, which is being conducted by a Canadian government agency, a rough comparison could be made with Westshore Terminals in Vancouver.

LaFiandra noted that Westshore Terminals Investment, the publicly-held company that owns Westshore, had a market capitalization of more than C$2.1 billion after market close Thursday.

“I don’t know what Ridley will sell for, but that’s the closest I can see,” said LaFiandra.

In addition, LaFiandra said he doesn’t know which parties have expressed interest in bidding on the terminal, but that the rumor mill has churned up a number of potential buyers, including a consortium of coal producers, a consortium of buyers, a large private equity group and a terminal operations group.

“But these are all just rumors,” said LaFiandra.

“I don’t know who it will go to.”

Ridley is currently undergoing an expansion that will increase its capacity from 12 million metric tons to 24 million mt by 2014. However, LaFiandra said the terminal has purchased adjacent land that could push the capacity to 60 million mt.

“We have locked up lands for expansion … (for) capacity to do up to 60 million metric tonnes (mt) should the market demand it,” said LaFiandra.

However Michael Gurney, manager of corporate communications with the Prince Rupert Port Authority, said that is not the case and LaFiandra may have been misunderstood.

“We typically don’t discuss commercial agreements or potential agreements with out clients. However, Ridley Terminals has not purchased land adjacent to the site,” he said.

Though currently expanding, the terminal has already sold its future 24 million mt capacity.

Coalspur, which is developing the Vista thermal coal mine in Alberta, recently concluded a 14-year agreement to secure 10.7 million mt of throughput at the terminal, with the option to extend the agreement another seven years.

Vista is slated to come online in 2015.

The terminal also contracts with a number of Canadian metallurgical coal producers, as well as suppliers from the Powder River Basin.

LaFiandra said that while the terminal is sold-out, it can potentially process spot and other short-term shipments as space allows.

The terminal is owned by the Canadian government, which built it in the early 1980s.

The sale was announced late last year. LaFiandra said he does not know the timeline for the sale process.

~With files from Shaun Thomas