Later this month, Canada’s first terminal exporting propane off the West Coast is expected to begin operations.
AltaGas started building its Ridley Island Propane Export Terminal in January 2017.
It is nearing completion on schedule and expected to be operational in the first quarter, with shipments starting in Q2, the company said on Friday.
The terminal has a locational advantage, AltaGas says, given very short shipping distances to markets in Asia, notably a 10-day shipping time compared to 25 days from the U.S. Gulf Coast.
Propane from British Columbia and Alberta will be transported to the facility using 50-60 rail cars per day through the existing CN rail network. The terminal is expected to ship 1.2 million tonnes of propane per annum (which is equivalent to approximately 40,000 bbls/d of export capacity).
“The project will positively impact the Western Canada Sedimentary Basin propane supply/demand balance, reducing the WCSB’s reliance on the U.S. market for exports,” analysts with Peters & Co. wrote in a recent research note.
“This should be constructive for WCSB propane pricing, which has long been in oversupply. [The project] will also allow producers to diversify their liquids exposure towards higher-valued global markets. The project is key to AltaGas’s overall strategy in northeast B.C., and we view this as one of the strongest opportunities for the company over the next few years.”