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AltaGas building propane export terminal

AltaGas is moving to northern B.C. in a half-billion-dollar way. The Alberta petroleum company confirmed it is building a shipping facility in Prince Rupert for the propane side of its many products during last week's B.C.
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AltaGas is moving to northern B.C. in a half-billion-dollar way.

The Alberta petroleum company confirmed it is building a shipping facility in Prince Rupert for the propane side of its many products during last week's B.C. Natural Resources Forum in Prince George.

The price tag for the facility is expected to top $500 million.

Premier Christy Clark hinted this might be only the beginning of AltaGas's corporate investments in this province.

"It's another half a billion dollar investment in the province," she said. "They are looking to improve markets in Asia. Like the LNG guys, they are thinking ahead. They aren't thinking about what the (petroleum commodity) prices are today. They know they need to develop that infrastructure. It's a lot of jobs for people, too. It will put them at about a $2 billion investment in B.C. Their plan is to get to $6 billion by 2020, which will make British Columbia the centre of (their corporate world). They may have Alta at the front of their name but their CEO lives in Kelowna and they are really committed to British Columbia."

Many in AltaGas's leadership structure were in Prince George for the forum. They withheld details of their broad plans for the province, but clearly indicated they were excited to be moving ahead from a base on Ridley Island, one of the key terminal facilities for the Prince Rupert Port Authority.

"We anticipate this facility will be the first to export propane from British Columbia's west coast, opening up new international markets for natural gas producers in Western Canada," said CEO David Cornhill. "We look forward to working closely with First Nations, governments, the community and other stakeholders to bring this project into operation."

It's a project that, at least in its preliminary stages, has the positive eye of environmental groups and First Nations because it utilizes a parcel of Ridley Island that was already well used for industry but had been abandoned and was in fact a "brown field" or spot of earth that had to be mothballed for all other purposes but more industry. This puts it back into productive use.

Propane, unlike the highly contentious issue of bitumen oil products, is comparatively much less harmful to the environment in spill scenarios, and also travels by train on existing lines, requiring no pipeline.

The propane, which is separated from other petroleum products already being mined in northeastern B.C., gives AltaGas another revenue stream, and it would flow on those rail lines from the Peace-region south to Prince George, then turn west to the facility they propose to build.

"Our hope is to move 1.2 million tonnes per year, which is equivalent to 40,000 barrels per day or 30 ships coming in to do business at the Port of Prince Rupert," said John Lowe, AltaGas's executive vice-president. "Prince Rupert has great rail facilities, with the help of CN. They have great port facilities. There is a lot of shipping expertise there, too, great people. It's a terrific port for us."

The alternative would be, as all others currently do, sending the propane by rail to Chicago, then south to the Gulf of Mexico where it is loaded onto ships that travel the Atlantic seaboard to the very bottom of the continent through the Panama Canal, then back up and across the Pacific Ocean to Asia, the best markets for propane.

Having a facility in Prince Rupert will significantly reduce travel time and all the greenhouse gasses that circuitous route requires.

"Our plan, subject to First Nations consultations and partnerships, is a final investment decision by the end of 2016 and commercial operation to start in 2018," said Lowe.

"Because it is on a brown field, because the rail system is already there, and a jetty is already there, this is not a complicated process once the consultations are in place."

The construction phase would generate about 250 jobs, then there would be about 40 people hired (many of them high-skill jobs) to operate the facility from then on.

Lowe said, in vague reference to the next stage of AltaGas involvement in B.C. that they couldn't help but notice that Ridley Island had a lot more unused land, and AltaGas had a lot more than just propane in their production portfolio, but there was nothing afoot in a tangible sense other than their progressing hopes for the propane facility.

The operators of the port were excited to be potentially adding a new kind of product to the list of things they take from the land and bundle onto boats for oceanic markets, and to be putting a large patch of brown field land back into use.

"Ridley Terminals is encouraged by this concrete step to diversify products shipped from our facilities while sustaining and creating new jobs in the community," said David Kirsop, chief operating officer and president of Ridley Terminals.

Don Krusel, president and CEO of the Port of Prince Rupert, said

"This project aligns with the type of growth and diversification envisioned in the port's development plan, with the potential to advance Prince Rupert's support of Canadian export industries through our trade gateway."

The price of propane has been subject to fluctuations like an resource-based commodity, but compared to the meteoric high and precipitous drop in oil prices, it has been more stable over time.