By Keith Norbury

AltaGas Ltd.’s Ridley Island Propane Export Terminal — the first such facility in Canada — is the latest addition to the port of Prince Rupert. The terminal, called RIPET for short, celebrated the export of its first shipment, bound for Asia, on May 23. “The completion of this game-changing project and the shipment of our first cargo are historic milestones for AltaGas, as well as for our project partners, customers, local indigenous peoples, surrounding communities, and western Canada’s upstream energy sector,” said Randy Crawford, President and Chief Executive Officer of AltaGas. “With RIPET now operational, we can offer producers a uniquely complete solution for their propane, providing premium netbacks and market optionality, while also positioning AltaGas to profitably grow our Midstream footprint — a true win-win for AltaGas and our customers.”

The terminal, which began introducing feedstock in mid-April and cost about $475 million to build, is expected to ship about 1.2 million tonnes of propane to Asia each year. “It’s an important market access solution for the Canadian energy sector, and leverages Canada’s key trading relationship with Japan,” said Brian Friesen, Vice-President of Trade Development and Communications with Prince Rupert Port Authority. “It’s an important piece of Canada’s trade story and finding market access solutions for the energy sector in Western Canada.” It also represents the first step of positioning Prince Rupert as a hub for exporting liquid bulk cargos, said Shaun Stevenson, the Port Authority’s President and CEO.

Royal Vopak, a Dutch multinational corporation with a history of more than 400 years, owns 30 per cent of RIPET through a Canadian subsidiary, and is in the project development and environmental assessment stages for a large liquid bulk terminal that would export six million to ten million tonnes annually of liquid bulk cargos such as propane, butane, methanol, and diesel, Mr. Stevenson said. “We expect that project will be through the environmental assessments over the next six months or so. And we expect the final investment decision in the spring,” Mr. Stevenson said. “It’s close to a billion-dollar project creating probably the most significant expansion of liquid bulk and gas capacity on the West Coast we’ve seen in decades.”

The RIPET project allows AltaGas, which owns a 70 per cent interest, to leverage assets along the company’s western Canadian value chain, said Mr. Crawford. Those assets include gas gathering and processing, liquids handling, fractionation, and export. Demand for cleaner fuels is growing among overseas markets. And that is expected to help AltaGas grow its midstream business.

The fuel originates from the Montney region, which straddles northeastern B.C. and the Alberta border and is one of the world’s largest shale gas reserves. AltaGas has processing plants in the Montney to extract natural gas liquids — such as propane, butane, and condensates from the gas stream as well as fractioners to separate them into saleable products, explained Randy Toone, Executive Vice President and President of Midstream for AltaGas, in a video on the company website. “It’s the cornerstone asset of our midstream infrastructure,” Mr. Toone said of RIPET, adding that it has opened up a new market for western Canadian propane that until now sold only in Canada and the U.S.

“RIPET signals to our customers overseas that Canada can deliver on energy exports, and the facility will make significant long-term contributions to international trade, support economic growth in northern B.C., and provide immediate access to clean-burning fuel in Asian markets, where demand is particularly strong,” Mr. Crawford said. “We’ve been extremely fortunate to work with a collaborative and experienced joint-venture partner in Royal Vopak and an extraordinary customer in Astomos.”

Rotterdam-headquartered Royal Vopak has significant experience with marine terminals across the globe. “We are very excited about this important milestone in our good and strategic partnership with AltaGas,” said Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak. “AltaGas is a well-respected Canadian company with experience in developing energy projects, while storage and handling of gas is an important strategic focus area for Vopak. This export facility opens market access for western Canadian producers to Asia, a premium market for propane.”

Astomos Energy Corporation, a Japanese propane importer and distributor, reached an agreement with AltaGas in 2017 to buy at least half of RIPET’s annual propane output. The facility’s location at Prince Rupert gives it a 15-day shipping advantage over competitors on the U.S. Gulf, where it takes 25 days for ocean cargo to reach Asia. “The ability to import Canadian propane is a significant advantage for Japan, as it provides greater energy security and supply diversification, while also enabling Canada to maximize the value of its natural resources,” said Astomos President Seiya Araki. “This first-of-its-kind project demonstrates to the world what can be achieved through effective partnerships between Canadian and Japanese companies, and will ultimately benefit both countries for decades to come.”

The prospects for growth of the liquid propane gas market at Prince Rupert are huge, considering that Asia is the planet’s largest importer of LPG. In Japan alone, more than 25 million homes use propane for cooking and heating.

Globally, propane fuels almost 25 million vehicles. The gas is also an important petrochemical industry feedstock.

In the design and building of RIPET, AltaGas worked closely with communities, governments of all levels, and First Nations.

“They did their homework before they came here,” Chief Councillor Harold Leighton of the Metlakatla First Nation said on the video on the AltaGas website. “It’s kind of a new approach in dealing with us as partners and not just trying to accommodate us and send us away. It’s a real partnership and we’re happy with that.” Alina Wesley, who now works for AltaGas, said on the video that she learned about the company’s operator training program through her local First Nation as well as from the company’s Townsend gas processing project near Fort St. John. “Having AltaGas offer this and especially to the First Nations definitely builds people’s hope up for great work and opportunities,” she said. “I feel very blessed to be a part of AltaGas’s team. They have gone beyond the expectations of making everybody feel comfortable, keeping us financially secured, and just preparing us for the facility work.”

Mayor John Helin of Lax Kw’alaams, an Indigenous community near Prince Rupert, praised its partnership with AltaGas to develop a training program for Lax Kw’alaams workers. “They included us from the beginning, respected us, trusted us, and worked with us to understand what our community needs,” the mayor said.

During operation, the facility is providing up to 40 jobs. That was good news to B.C. Premier John Horgan, who praised the initiative. “The newly opened AltaGas Propane Export Terminal is creating good, sustainable jobs and economic development for the North Coast,” Mr. Horgan said. “This project shows that taking care of our air, land and water isn’t just the right thing to do — it’s good for the bottom line.”

The RIPET site, which has a history of industrial development, has excellent access to the CN railway network, and a world-class marine jetty with deep-water access. AltaGas has secured tenure to the land as well as marine and rail infrastructure through long-term agreements. RIPET can handle 50 to 60 rail cars daily and is expected to export 20 to 30 shiploads of propane by Very Large Gas Carriers, or VLGCs, each year. “The experience working with AltaGas has been great from the moment we started talking about and investigating the project with Ridley Terminals right through as we reach the closure of construction,” Mr. Stevenson said. “AltaGas has many of the same values that the Port of Prince Rupert has — a commitment to sustainability, environmental stewardship, safety, and has been very professional to work with for the entire journey.”