AltaGas advances LPG proposal

AltaGas, a Calgary-based energy utility, is closing in on a final investment decision this year to proceed with the latest addition to its liquefied petroleum gas business.

It has reached a preliminary agreement on key terms with Japan’s Astomos Energy to sell at least 50 percent of the 1.2 million metric tons a year it plans to export from the Ridley Island propane export terminal near Prince Rupert.

The project is expected to cost up to C$500 million and, subject to environmental and other approvals, is scheduled to start commercial operations in 2018.

AltaGas said the terminal is “one of the key building blocks of our strategy to build out natural gas processing and liquids separation capacity” in the Montney gas formation of northern British Columbia and Alberta.

It said market diversity, including sales outlets beyond North America, is a “key step forward” for Canadian gas producers.

AltaGas already owns gas processing facilities in British Columbia and Alberta, including production of LPG, and is part owner and operator of a similar LPG export terminal in Ferndale, Washington.

One of largest LPG players

It is one of the largest LPG players in the world, handling in excess of 10 million metric tons a year.

It operates 21 very large gas carriers and a top market share in both sales and imports to Japan, along with significant market share across Asia.

Propane from gas producers will be shipped to the Ridley Island facility on the existing Canadian National Railways network, which is expected to offload 50 to 60 rail cars a day and to deliver propane to Asia on 20 to 30 tankers per year.

The application is being reviewed by the Canadian Environmental Assessment Agency, while the National Energy Board is handling an application for a 35-year propane export license.

AltaGas said it also started consulting affected First Nations, communities, government and environmental and regulatory authorities early this year.

- GARY PARK