Following a rigorous approval process, community consultations and two years of construction, the AltaGas Ridley Island Propane Export Terminal (RIPET) in Prince Rupert is almost ready for operations. As the first liquefied petroleum gas (LPG) export terminal in Canada, the significance of the opening is not lost on Dan Woznow, Senior Vice President, Energy Exports. “This is a big step forward for Canada,” Woznow said in a recent interview with BC Shipping News. “Being Canada’s first propane export operation was not without its challenges, but we see the stage now set for even greater opportunities to follow.”
As a leading North American energy infrastructure company headquartered in Calgary, AltaGas first began midstream operations in 1994 with two service contracts and 21 employees. Today, the company employs almost 3,000 people with operations in five Canadian provinces and numerous American states. They focus on three segments of the overarching energy business — midstream (natural gas gathering and processing, natural gas liquids, extraction and fractionation, transmission, storage, natural gas and NGL marketing); utilities (serving approximately 1.6 million customers); and power (generation and sale of capacity, electricity and ancillary services and related products).
The RIPET project has been designed to export up to 1.2 million tonnes of propane per year. In selecting the Prince Rupert location, Woznow noted that the brownfield site at the southwest corner of Ridley Island checked all the boxes. “The fact that there was an existing deep-water dock with berthing facilities as well as excellent rail access were key to our decision,” he said, adding that the terminal will be able to utilize some of the existing infrastructure on the site that was once destined to be a sulphur facility.
Once the site was identified, Woznow and his team worked with Ridley Terminals Inc. to get agreements in place and then entered the environmental assessment phase of the project as well as engaged the local community to make sure they were on board. In October 2016, AltaGas was granted approval from the National Energy Board for a 25-year licence and by January 2017, a positive Final Investment Decision was announced. Construction began in April 2017.
From source to dock
Bringing the propane in from the interior and northeast sectors of B.C. as well as northern Alberta, AltaGas will be using the CN mainline over to Ridley Island where about nine kilometres of new track was laid in the yard to service the facility. “About 50 to 60 pressurized rail cars per day will bring the propane to the terminal where it will be offloaded to temporary storage tanks before being stored in the larger tank which will keep the propane chilled,” Woznow said. He clarified that, once chilled, the propane is no longer stored under pressure.
To get the propane to the ship, AltaGas will be sharing the RTI dock. “It’s an older dock so we had to be careful about the loading,” he said. “We have installed two specially designed loading arms that minimize the load on the existing structure. Another design feature that was a great benefit for us was that all the modifications required to the dock were above the waterline.”
AltaGas has partnered with Astomos Energy Corporation in a long-term offtake contract for 50 per cent of the 1.2 million tonnes per year anticipated to move through the terminal. Astomos, a joint venture between Idemitsu Kosan Co., Ltd. and Mitsubishi Corporaton, is one of the world’s largest players in the LPG business. Headquartered in Tokyo and operating a fleet of 21 Very Large Gas Carriers (VLGCs), they import cargoes into Japan where nearly half of Japanese households rely on propane for their energy. While a significant portion of the cargo will stay in Japan for domestic use, Astomos also has a trading network that extends to India, China, Korea, Indonesia and other South East Asian countries.
The Astomos fleet is impressive — eight of the vessels (both owned and under long-term charter) are less than two years old, including the most recent new build, named Maple Gas in a nod to the Canadian exports. Maple Gas was built at the Kawasaki Heavy Industries’ Sakaide Shipyard and was delivered to Astomos in February of this year. It is 230 metres in length and 37 metres wide with a draft of 21 metres and can hold up to 82,200 cubic metres of propane. Woznow estimated that there will be between 20 and 30 ship calls per year.
For escorting and berthing, AltaGas entered into an agreement with SAAM SMIT Towage Canada to provide the services. As part of the agreement, AltaGas and SST are awaiting the imminent delivery of the SST Tsimshian Warrior — the first IMO Tier III emissions-compliant escort tug for the West Coast. Designed by Robert Allan Ltd., the Warrior was built by UZMAR Shipyards in Turkey and is capable of all ship-handling duties, including in heavier weather conditions. She has a bollard pull of 80+ tonnes and indirect escort forces of up to 120 tonnes at 10 knots.
In addition to being one of the greenest tugs in the world, the Warrior was designed to meet a stringent set of performance requirements that were carefully identified and verified by multiple real-time, full-mission bridge simulations done in collaboration with the BC Coast Pilots Ltd., Pacific Marine Institute, Towing Solutions Inc., Lantec Marine, Robert Allan Ltd. and SST Canada. “The routes are the same as other vessels coming to the West Coast so the exercises focused on the type of ship and tug handling under extreme weather conditions,” Woznow said.
Having a corporate neighbour like AltaGas comes with significant local benefits. Over 250 people were employed while construction was completed and of those, about 60 per cent came from the local community. Up to 40 permanent jobs will be available once operations begin. “It makes much more sense for us to use local people whenever possible and it’s important to us that the local community benefit as much as possible from the project,” said Woznow.
Given the considerable growth being seen in Prince Rupert with projects like the expansion of Fairview Container Terminal, and the potential for even more growth with companies like Royal Vopak currently going through the environmental assessment process for another bulk liquid terminal on land adjacent to RIPET, finding staff can be a challenge. However, Woznow described a very successful six-month operator training program that AltaGas developed in collaboration with Northwest Community College and the Northern Alberta Institute of Technology. The program, which ran from June to December 2018, produced 11 new employees and included both First Nations and non-Indigenous people. To fill the gap, AltaGas will be pulling staff from their existing facilities in both B.C. and Alberta but, Woznow added, “our preference is still to hire as many local people as possible.”
Aside from the direct economic benefit of the project, AltaGas has been an active supporter of non-profit community initiatives and improvements. “We donated $250,000 to support the construction of a controlled rail crossing in Port Edward as well as $10,000 to the North Coast Transition Society and another $10,000 to Port Edward’s public boat launch,” said Woznow. “For AltaGas, when we come into a community, it’s for the long term and we become part of that community. Donations for things like rail crossings and docks are important because funding is always a challenge for communities but more than that, it’s the little things that truly make you a part of the community — initiatives like partnering with Earth Rangers on a School Outreach Program and participating in events like Cow Bay Days or actively supporting not-for-profit groups like the Kaien Island Trail Enhancement Society.”
“This project has given us a good foothold in Canada for global exports,” said Woznow when asked about future growth. “If you take Astomos as just one example, they are currently getting most of their propane from the Gulf Coast. That’s 25 days away from Asia and that’s not even taking into account delays that can be experienced at the Panama Canal.” He added that having a 10-day route to Japan and other countries in South East Asia has been generating interest for the potential export of other products like butane or ethane.
“This is a big step for Canada,” Woznow concluded. “We’ve been under the radar of overseas markets but as importers start seeing more and more vessel activity in this area, we’ll be seeing more companies interested in what we’re doing.”