AltaGas has subleased lands from Ridley Terminals to build a propane export facility.

AltaGas has subleased lands from Ridley Terminals to build a propane export facility.

AltaGas proposes propane export facility at Ridley Terminals

The West Coast of Canada's first-ever propane export facility could be located at Ridley Terminals outside Prince Rupert.

The West Coast of Canada’s first-ever propane export facility could be located at Ridley Terminals outside Prince Rupert.

On Wednesday, Jan. 20, AltaGas Ltd. announced that it has signed into an agreement, including a 20-acre sublease with Ridley Terminals, to develop, build, own and operate a terminal, called the Ridley Island Export Terminal, as an initial step in the regulatory approval and civic engagement processes to come in the future.

A final investment decision by AltaGas is expected to come in late 2016, with propane export operations commencing in 2018 (as a target date).

The proposal includes exporting 1.2 million tonnes of propane per year, which is expected to come from B.C. and Alberta natural gas producers, equalling 20 to 30 ships per year capable of carrying half 500,000 barrels of propane calling on the Port of Prince Rupert.

The CN rail network is expected to be the mode of transportation to deliver the propane to the facility on Ridley Island.

“We had been looking for a good site for years now on the West Coast and this one really seemed to be the best possible one for us as it’s an existing facility. There’s already a world class marine jetty. It’s brownfield, it’s on an existing industrial site, and we know Prince Rupert, our affiliate Pacific Northern Gas serves Prince Rupert. We like the area and it’s a really good fit for us,” said AltaGas executive vice-president John Lowe Wednesday.

“It’s got the rail facilities in place. It’s got a world-class port, it’s a 10-day sail to Japan, which is a premium market for propane and we think everything aligned for us on it.”

Lowe added that AltaGas is specifically looking at the Asian market and that the U.S., a traditional buyer of propane, currently has a surplus thanks to its shale gas production.

“We are very excited about the opportunities presented by the Ridley Island Propane Export Terminal,” said David Cornhill, Chairman and CEO of AltaGas in a press release sent out Wednesday.

“We anticipate this facility will be the first to export propane from British Columbia’s west coast, opening up new international markets for natural gas producers in Western Canada. We look forward to working closely with First Nations, governments, the community and other stakeholders to bring this project into operation,” he continued.

Ridley Terminals Chief Operating Officer and President David Kirsop added that the diversification away from coal, Ridley’s main export, is a good sign for the economic well-being of the company.

“Ridley Terminals is encouraged by this concrete step to diversify products shipped from our facilities while sustaining and creating new jobs in the community,” he said.

Ridley Terminals, a federal crown corporation, currently exports metallurgical and thermal coal, and petroleum coke from B.C., Alberta and the United States to Asia. Ridley (RTI) is operating on leased lands from the Prince Rupert Port Authority and will sublease part of their land to AltaGas for this development.

Construction costs for the facility are expected to be within the range of $400 million to $500 million and AltaGas presently “owns or has an interest in” six natural gas processing facilities in B.C. and Alberta that produce propane and AltaGas also operates a similar propane export facility in Ferndale, Washington.

The diversification of Ridley Terminals also fits in with the Prince Rupert Port Authority’s (PRPA) mandate to have a multi-faceted gateway by the mid-2020s that includes coal, LNG, container cargo, potash, grain, pellets and more.

“This project aligns with the type of growth and diversification envisioned in the Port’s development plan, with the potential to advance Prince Rupert’s support of Canadian export industries through our trade gateway” said PRPA President and CEO Don Krusel.

Lowe added that talks with the Port and Ridley were easy thanks to the shared interests of each organization.

“We were on the same side of the table on the diversity of the product. In western Canada, we need market access [and] we need new markets. Ridley and the Port are saying ‘Well, look, we want diversification, we want growth’. This is in line with the Port’s development plan, it’s in line with what Ridley Terminals has been trying to do to get new products on their docks,” said the executive VP.

AltaGas also stated that preliminary engineering has been completed and the front end engineering and design study has begun, while the company has already begun engaging and consulting with First Nations communities, government and environmental and regulatory authorities about the project.

“We look forward to working with the community to bring this project to fruition,” said Lowe.

 

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