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a u g u s t / s e p t e m b e r 2 0 1 6 www.resourceworld.com 59 Oil & g a s AltaGas signs British Columbia propane MOU by Bruce Lantz O fficials at Calgary's AltaGas Ltd. [ALA-TSX] are confident an agree- ment with a major customer for its liquefied petroleum gas (LPG) signals good times ahead. An MOU between AltaGas's wholly-owned subsidiary, AltaGas LPG Limited Partnership, and Astomos Energy Corp. outlines Astomos' commitment to purchase at least 50% of the 1.2 million tonnes of propane to be shipped annually from an AltaGas export terminal proposed for Ridley Island, near Prince Rupert, off British Columbia's northwest coast. "This confirms our thesis that there's an appetite for propane from Asian buyers," said John Lowe, Executive Vice-President of AltaGas. "They see this as a great oppor- tunity to diversify their supply, and for us it confirms the market demand." The Ridley Island propane export ter- minal, expected to cost $400-$500 million, will be Canada's first. "This export terminal is one of the key building blocks of our strategy to build out natural gas processing and liquids sep- aration capacity in the Montney formation, a leading North American gas play," said AltaGas President and CEO David Harris in a press release. "The additional processing capacity we are building and connectivity to the export terminal provides upstream energy producers with unparalleled access at the most competitive rates to these pre- mium markets." The agreement is good news for the energy sector in northeast British Columbia, which has struggled of late as liquefield natural gas (LNG) proposals have stalled. "Market diversity, including global markets outside Canada, is a key step for- ward for Canadian producers," said Harris. "We look forward to working closely with Astomos, one of the largest LPG players in the world, and with producers to maxi- mize their profitability." Astomos, a joint venture between Idemitsu Kosan Ltd. and Mitsubishi Corporation established in 2006, is one of the largest LPG players in the world, han- dling more than 10 million tonnes of LPG annually. The company currently operates a fleet of 21 Very Large Gas Carriers that support its importing, distribution and international trading businesses. It has significant market share across Asia, where the product is used for both household and industrial purposes. "This is a bright light in an environ- ment which has had its challenges," said Lowe. "We have a fantastic site, a new market and a living, breathing purchaser." AltaGas has begun the formal environ- mental review process for the terminal, on a brownfield site with a history of indus- trial development. "We're continuing to work through the federal regulatory process and with area First Nations," said Lowe, adding that the company expects to make a final invest- ment decision by year's end. The site is being leased by AltaGas from Ridley Terminals Inc. (RTI) and is con- nected to Canadian National's existing rail network and AltaGas processing plants. It includes rights to an existing world-class marine jetty with deepwater access to the Pacific Ocean. RTI leases the land from the Prince Rupert Port Authority. Preliminary engineering has been completed, and the front-end engineer- ing and design study is underway. They expect to begin commercial operations in 2018. AltaGas owns natural gas processing facilities in BC and Alberta that include the production of LPG. AltaGas is part owner and operator of a similar LPG export termi- nal in Ferndale, WA. n