AltaGas, Vopak reach FID to develop Ridley Island Energy Export Facility
AltaGas Ltd. and Royal Vopak NV (Vopak) have made a final investment decision to develop the Ridley Island Energy Export Facility (REEF), a large-scale LPG, methanol, and bulk liquids terminal with rail, logistics and marine infrastructure on Ridley Island, BC, aimed at connecting Canadian energy to Asian markets (OGJ Online, Apr. 26, 2023).
REEF will be developed on a 190-acre site adjacent to AltaGas and Vopak's existing Ridley Island Propane Export Terminal (RIPET), on lands administered by the Port of Prince Rupert (PRPA) for which the joint venture has executed a long-term lease, the companies said in a joint release May 29. REEF has been granted the key Federal and Provincial permits to construct storage tanks, a new dedicated jetty, rail and other infrastructure required to operate the facility.
The project, at gross JV capital cost of $1.35 billion excluding governmental incentives and support, will be developed and brought online in phases.
Phase 1 will include about 55,000 b/d of initial LPG export capacity, including propane and butane, 600,000 bbl of LPG storage, a new dedicated multi-product jetty, and rail and logistics infrastructure. The infrastructure will include 10 dual sided rail offloading slots and 25 km of multi-track infrastructure that is unit-train capable and will provide flexibility to overcome congestion and outages, the company said.
The JV has completed all major gating items, including front-end engineering design (FEED). Site clearing work is more than 95% complete and with required permits in hand. The bulk of the construction activities are expected to take place over 2025 and 2026 with select workstreams beginning in 2024, the companies said. With required permits in hand, the project is expected to come online near end-2026.
As part of the positive FID, AltaGas is increasing its 2024 capital expenditure guidance to $1.3 billion from $1.2 billion.
AltaGas is in negotiations with long-term counterparties and anticipates moving closer to its long-term tolling target of 60% of total export volumes, for the beginning of the 2027 NGL year, starting on Apr. 1.
The JV retains the option to progress evaluation work on additional fuels, such as hydrogen, in subsequent phases.
"This positive FID enables AltaGas to continue connecting Canadian energy to Asian markets and drive valuable outcomes for all our customers," said Vern Yu, president and chief executive officer of AltaGas.
"Canada has a structural advantage in delivering LPGs to Asia with the shortest shipping time and lowest maritime emissions footprint. AltaGas delivers more than 19% of Japan's propane and 13% of South Korea's LPG imports, connecting our upstream customers with customers in Asia. We look forward to working with our partners to drive more long-term value creation with REEF,” he said.