AltaGas Secures Sales for Propane Export Terminal
The proposed Ridley Island Propane Export Terminal near Prince Rupert, British Columbia received a boost Monday with the announcement of a multi-year purchase agreement for half of its output. If built, the facility would be the first of its kind in Canada.
AltaGas LPG, the developer of the terminal, signed with Astomos Energy of Japan for the sale of 600,000 million tons per annum of the facility's liquid propane gas. "This Export Terminal is one of the key building blocks of our strategy to build out natural gas processing and liquids separation capacity in the Montney formation, a leading North American gas play. . . . Market diversity, including global markets outside Canada, is a key step forward for Canadian producers. We look forward to working closely with Astomos, one of the largest LPG players in the world, and with producers to maximize their profitability," said David Harris, president and CEO of AltaGas.
His firm has begun the environmental review process for the terminal, to be located on a brownfield site with an existing jetty and deepwater access. A FEED study is already nearing completion, and AltaGas expects to make a final investment decision on the $500 million project some time this year. Operations could commence as soon as 2018 if the firm secures necessary approvals.
AltaGas operates a similar terminal in Ferndale, Washington, along with gas processing facilities in B.C. and Alberta. Astomos, a joint venture of Idemitsu Kosan and Mitsubishi, is the largest LPG player in Japan: it trades over 10 million tonnes of LPG per year and operates a fleet of more than 20 very large gas carriers.
AltaGas VP Energy Exports Dan Woznow told local media that the Asian market for propane is a major opportunity for Canadian producers. "24 million homes in Japan use propane like we use natural gas. It's used in heating and cooking in Japan. Indonesia is converting to propane – they've been using kerosene on many of their islands – because propane is cleaner burning and doesn't spill like kerosene does."
AltaGas exited or delayed two LNG terminal proposals earlier this year, Triton LNG and Douglas Channel LNG, citing the sharp decline in prices on the Asian market.