AltaGas makes decision on export terminal

AltaGas Ltd. reached a positive final investment decision on the Ridley Island Propane Export Terminal, as it received approval from federal regulators.

AltaGas executed long-term agreements, securing land tenure along with rail and marine infrastructure on Ridley Island. The company plans to proceed with the construction, ownership and operation of the export terminal, AltaGas says.

The terminal is expected to be the first propane export facility on Canada’s west coast, near Prince Rupert, British Columbia, Canada, on a section of land leased by Ridley Terminals Inc. from the Prince Rupert Port Authority. The location provides short shipping distances to markets in Asia, the company says. The site also benefits from railway access and a marine jetty with deepwater access to the Pacific Ocean.

“Propane exports off of Canada’s west coast pull together our vision of offering Canadian producers a complete energy value chain,” says David Harris, president and CEO of AltaGas. “Together with our northeast British Columbia infrastructure, once the Ridley export terminal is built and operating, we will give producers new access to premium Asian markets for their propane.”

The export terminal will be designed to ship 1.2 million tons of propane per year and is estimated to cost $450 million to $500 million, according to AltaGas. Along with the final investment decision, AltaGas plans to offer a third party the option to take an equity position of up to 30 percent in the Ridley export terminal.

Construction is expected to begin early this year in compliance with the approval and will proceed under the self-perform model used by AltaGas to build its other projects. The terminal is expected to be in service by the first quarter of 2019, Altagas says.

AltaGas LPG Ltd. Partnership also entered into a memorandum of understanding with Astomos Energy Corp. in May 2016 contemplating a multi-year agreement for the purchase of at least 50 percent of the 1.2 million tons of propane available to be shipped from the terminal each year, AltaGas says. A definitive agreement has been finalized with Japan-based Astomos containing commercial terms for the sale and purchase of these propane volumes.

“Astomos is one of the largest LPG players in the world, providing great access to Asian markets for western Canadian producers,” Harris says. “We look forward to maximizing our relationship with them.”

AltaGas is an energy infrastructure company with a focus on natural gas, power and regulated utilities.