Joint venture (JV) partners AltaGas Ltd. and Royal Vopak have made a positive final investment decision (FID) on the Ridley Island Energy Export Facility (REEF), a large-scale liquefied petroleum gas (LPG) and bulk liquids terminal with rail, logistics and marine infrastructure on Ridley Island, British Columbia in Canada.
The move follows a five-year environmental preparation and review process, extensive engagement with multiple stakeholders including Indigenous rights holders and local communities, the two companies said in a joint news release.
REEF will be developed on a 190-acre (77-hectare) site adjacent to AltaGas’ and Vopak’s existing Ridley Island Propane Export Terminal (RIPET), on lands administered by the Port of Prince Rupert (PRPA) where the JV has a long-term lease, according to the release.
The project, set to be developed and brought online in phases, will have the capability to facilitate the export of LPGs, methanol and other bulk liquids.
Phase 1 will include approximately 55,000 barrels a day of initial LPG export capacity, including propane and butane, 600,000 barrels of LPG storage, a new dedicated multi-product jetty, and extensive rail and logistics infrastructure. The infrastructure will include 10 dual-sided rail offloading slots and 25 kilometers of multi-track infrastructure that is unit-train capable and will provide flexibility to overcome congestion and outages. More than 80 percent of Phase 1 capital investments will be able to be leveraged in future REEF phases, providing capital efficient buildout for subsequent expansions, according to the release.
AltaGas said it has made considerable contracting progress across its global exports platform, including tolling levels increasing to 56 percent starting in the second quarter. AltaGas is in active negotiations with several long-term counterparties, which would move the company to its long-term tolling target of 60 percent of total export volumes.
In subsequent phases, the JV will have the option to progress evaluation work on fuels of the future, such as hydrogen, which has growing customer interest in Asia, particularly Japan and South Korea. The JV has strong core competencies in this area with Vopak offering one of the pre-eminent third-party hydrogen storage platforms globally, with multiple terminals in operation across several countries, the release said.
The JV said the projected gross capital cost is around $1 billion (CAD 1.35 billion), excluding governmental incentives and support. The capital cost breakdown of Phase 1 includes approximately $638.95 million (CAD 875 million) for construction of the facility, balance of the plant and LPG storage tanks and $346.86 million (CAD 475 million) for construction of the new dedicated jetty and extensive rail and logistics infrastructure.
“This positive FID enables AltaGas to continue connecting Canadian energy to Asian markets and drive valuable outcomes for all our customers,” AltaGas President and CEO Vern Yu said. “Canada has a structural advantage in delivering LPGs to Asia with the shortest shipping time and lowest maritime emissions footprint. AltaGas delivers more than 19 percent of Japan’s propane and 13 percent of South Korea’s LPG imports, connecting our upstream customers with customers in Asia. We look forward to working with our partners to drive more long-term value creation with REEF”.
“We are excited to be able to execute on our growth strategy and invest in export infrastructure on this highly strategic location,” Vopak Chairman and CEO Dick Richelle said. “Prince Rupert, with the shortest shipping distances between North America and Asia, gives the opportunity to drive progress by increasing the trade between Canada and the Asia Pacific region. We are proud to contribute to this development and are thankful for the good collaboration with our partner AltaGas and other key stakeholders. The trust and support of local First Nations and communities makes this envisioned terminal a reality”.
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