BY BILL PHILLIPS
Skeena Bulkley Valley MP Nathan Cullen is pleased with this week’s announcement from AltaGas that the company will invest in its proposed Ridley Island Propane Export Facility.
“It’s really encouraging to see a sound development project given a positive investment decision in the Northwest,” said Cullen. “This is particularly good news for Prince Rupert and Port Edward. The siting for the project on Ridley Island is suitable for this type of development and it will put the Northwest on the map as the first propane export terminal on the west coast of Canada.”
AltaGas Ltd. announced Tuesday it has reached a positive final investment decision on its Ridley Island Propane Export Terminal, having received approval from federal regulators. AltaGas has executed long-term agreements securing land tenure along with rail and marine infrastructure on Ridley Island, and will proceed with the construction, ownership and operation of the Ridley Export Terminal.
“We are consulting and working with the First Nations whose traditional territory the Ridley Export Terminal is located within,” said David Harris, President and CEO of AltaGas, in a press release. “Collaborating closely with First Nations and communities to create sustainable social value is of paramount importance to us and we look forward to a long and mutually beneficial relationship with the First Nations in the region.”
The Ridley Export Terminal is expected to be the first propane export facility on Canada’s west coast. The site is near Prince Rupert, British Columbia, on a section of land leased by Ridley Terminals Inc. from the Prince Rupert Port Authority. The locational advantage is very short shipping distances to markets in Asia, notably a 10-day shipping time compared to 25 days from the U.S. Gulf Coast. The brownfield site also benefits from railway access and a marine jetty with deep water access to the Pacific Ocean.
The Ridley Export Terminal will be designed to ship 1.2 million tonnes of propane per year and is estimated to cost approximately $450 – $500 million. Along with the final investment decision, AltaGas will be offering a third party the option to take an equity position of up to 30 percent in the Ridley Export Terminal.
“Propane exports off of Canada’s west coast pulls together our vision of offering Canadian producers a complete energy value chain,” said Harris. “Together with our northeast B.C. infrastructure, once the Ridley Export Terminal is built and operating, we will give producers new access to premium Asian markets for their propane.”
Based on production from its existing facilities and forecasts from new plants under construction and in active development, AltaGas anticipates having physical volumes equal to approximately 50 per cent of the 1.2 million tonnes. The remaining 50 per cent is slated to be supplied by producers and aggregators in western Canada. AltaGas expects to underpin at least 40 per cent of the Ridley Export Terminal throughput under tolling arrangements with producers and other suppliers.
As previously announced on May 24, 2016, AltaGas LPG Limited Partnership entered into a Memorandum of Understanding with Astomos Energy Corporation contemplating a multi-year agreement, for the purchase of at least 50 per cent of the 1.2 million tonnes of propane available to be shipped from the Ridley Export Terminal each year. A definitive agreement has been finalized with Astomos containing the key commercial terms for the sale and purchase of these volumes of propane. Commercial discussions with Astomos and several other third party offtakers for further capacity commitments are proceeding.
“Astomos is one of the largest LPG players in the world providing great access to Asian markets for Western Canadian producers,” said Harris. “We look forward to maximizing our relationship with them.”
Construction is expected to begin in early 2017 in compliance with the approval, and will proceed under the self-perform model successfully used by AltaGas to build its other projects on time and on budget. The Ridley Export Terminal is expected to be in service by the first quarter of 2019.
“This project will provide many employment opportunities for people across the north and B.C.,” said Cullen. “I congratulate AltaGas for committing to project development in the Northwest. It is my hope that this announcement will help to stimulate further opportunities for communities in the region.”
The proposed propane export terminal will provide 200-250 jobs during construction and 40-50 permanent jobs upon completion.