AltaGas of Canada said it has entered into a memorandum of understanding with Astomos Energy for the sale and purchase of LPG from the proposed Ridley Island propane export terminal.
The export terminal provides AltaGas’ customers with the opportunity to “ realize incremental value through access to Asian markets and pricing for western Canadian propane ,” the company said in a statement on Tuesday.
The deal comes just months after the Douglas Channel LNG Consortium, led by AltaGas, halted further development of the floating LNG export project in British Columbia due to “unfavourable market conditions”.
To remind, the consortium, which includes Japan’s Idemitsu, EDF Trading of France and Exmar of Belgium, had planned to achieve a final investment decision on the small-scale LNG project by the end of 2015.
In addition, the JV between Idemitsu and Altagas has also suspended work on the proposed Triton LNG export terminal that was also planned in B.C.
AltaGas said it is now focusing on what it claims Canada’s first propane export terminal.
Under the terms of the multi-year deal, LPG player Astomos will purchase at least 50 percent of the 1.2 million tonnes of propane available to be shipped from the export terminal each year.
Astomos Energy was established as joint venture between Idemitsu and Mitsubishi Corporation.
AltaGas said it has begun the formal environmental review process for the export terminal, located near Prince Rupert, B.C. on a brownfield site that is connected to Canadian National’s existing rail network and AltaGas processing plants.
Preliminary engineering has been completed and the front-end engineering and design study is being completed for the second quarter of 2016.
AltaGas expects to reach a financial investment decision in 2016 for the approximately $400 – $500 million terminal and commence commercial operations in 2018, subject to continuing First Nations and stakeholder engagement and receipt of necessary approvals.
LNG World News Staff