AltaGas Signs Multi-Year Purchase Agreement With Japanese Energy Company
AltaGas’s proposed Ridley Island Propane Export Terminal near Prince Rupert, B.C. got a shot in the arm when Japan’s Astomos Energy signed an offtake MOU for a multi-year purchase agreement for at least half of its planned production.
AltaGas LPG, the terminal developer, agreed to undisclosed commercial terms for the sale of a minimum of 600,000 tons per year of the facility’s 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,” said David Harris, president and CEO of AltaGas. “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.”
AltaGas has begun the terminal’s environmental review process and a front-end engineering and design study is nearing completion.
The Payoff
The terminal would be Canada’s first Pacific LPG export terminal, providing a desperately needed outlet for Western Canadian propane, which is fighting for market share amidst a continental glut. AltaGas expects to make the final investment decision on the $500-million terminal this year. The terminal would come on stream in 2018.
AltaGas currently sends some of its propane to an LPG export terminal in Ferndale, on the coast of Washington state. Astomos, a joint venture of Idemitsu Kosan and Mitsubishi, is the largest LPG trader in Japan.
