AltaGas to Bring Canadian Propane Closer to Asia
- Business & Finance
Canadian energy infrastructure company AltaGas has reached a positive final investment decision (FID) on its Ridley Island Propane Export Terminal, the first propane export facility on the country’s west coast, having received approval from federal regulators.
The firm said it has signed 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 terminal. The construction is expected to begin in early 2017 in compliance with the approval and the new facility will be in service by the first quarter of 2019.
The site is near Prince Rupert, British Columbia, on a section of land leased by Ridley Terminals 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 US Gulf Coast, AltaGas said. In addition, the site benefits from marine jetty and berthing facilities with deep water access to the Pacific Ocean.
The terminal will be designed to ship 1.2 million tons of propane per year, which will be shipped to markets in Asia on approximately 20 to 30 very large gas carriers (VLGCs).
The proposed facility is estimated to cost approximately CAD 450 – 500 million (USD 338 – 376 million).
Along with FID, AltaGas plans to offer a third party the option to take an equity position of up to 30 percent in the Ridley Export Terminal.
In May, 2016, AltaGas LPG entered into a memorandum of understanding with Tokyo-based Astomos Energy Corporation (Astomos) 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.
The firm said it has finalized a definitive agreement with Astomos containing the key commercial terms for the sale and purchase of these volumes of propane. Discussions with Astomos and several other third party off-takers for further capacity commitments are proceeding, according to AltaGas.