The market shift led AltaGas to move into the LPG terminal space by partnering with Dutch infrastructure provider Royal Vopak on the Ridley Island Propane Export Terminal (RIPET) in the Prince Rupert, BC region—commissioned in 2019 and now with an expanded capacity of 92,000 b/d—and by assuming ownership of the Ferndale export terminal through its acquisition of former Canadian midstream company Petrogas Energy in 2020.
In April 2021, Pembina brought into service the only other propane export plant on the Canadian west coast to date, the 25,000 b/d Prince Rupert Terminal on Watson Island.
These terminals allowed Canada’s propane exports to non-US destinations to increase to more than 92,000 b/d in 2024, 42% of the 218,000 b/d total, based on CER data. According to a recent US Energy Information Administration (EIA) report, Japan, and South Korea are the major Asian customers for Canadian propane.
Canadian LPG has an inherent transportation cost advantage to East Asian markets because the shipping time from the BC coast is shorter than the competition’s, said WoodMac’s Sivaswamy.
For example, “the travel time from Canada’s west coast to countries in Far East Asia is only 10-12 days, while it can be greater than 22 days from the US Gulf Coast. Any issues in the Panama Canal exacerbate the transit time, such as the drought situation in 2023, when VLGCs had to wait for 8-10 days to cross the canal,” she said.
At the same time, Canadian propane producers are continuing to benefit financially from exporting to Asian markets such as Japan and South Korea, according to AltaGas, opening the door for additional exports in the future. The company estimates the netback for shipping propane to Asia via RIPET was C$6/bbl, or 14.3 cents per US gallon, higher than if it had been shipped to the propane hub in Conway, Kan., for the past 2 years.
“Also, only propane is currently exported from Canada [to Asia]. We see potential for butane export terminals to be added in the future,” Sivaswamy added.
Four additional LPG export projects are moving forward on the BC coast. The projects have the potential to more than double Canada’s LPG export capacity to Asia to 394,000 b/d, including capacity from the Ferndale terminal in Washington state.
The Ridley Island Energy Export Facility (REEF), another joint venture between AltaGas and Royal Vopak, involves three projects at various stages of development. The C$1.35 billion initial project, with design capacity of 55,000 b/d of propane and butane, is under construction and expected to come online near end-2026.
During its third-quarter earnings call on Oct. 29, AltaGas noted the joint venture had sanctioned the REEF Optimization One project. At an estimated capital cost of C$110 million, the project aims to increase REEF’s original capacity by about 25,000 b/d, with an in-service date slated for second-half 2027.
AltaGas and Royal Vopak are also advancing engineering, permitting, and stakeholder relations work for the REEF Optimization Two project, which would add 60,000 b/d to the first two projects.
On June 11, Trigon Pacific Terminals took positive FID for its 2.5 million tpy (79,000 b/d) Trigon Pacific LPG project. The C$750 million project is to repurpose a thermal-coal export terminal on Ridley Island to export LPG by late 2029. The fate of the project is uncertain, as the Prince Rupert Port Authority previously provided AltaGas and Royal Vopak exclusive rights to export LPG from the port. Trigon sued the port authority in November 2023, but the matter remains before the courts.
Pembina has no plans to expand LPG export capacity at its Prince Rupert Terminal at the present time. However, during the company’s second-quarter 2025 earnings call, Scott Burrows, the company’s president and chief executive officer, did not rule out future expansion.
“As we secure more barrels, we will look to where the optimal markets are and that could be further barrels off the west coast or it could be to other markets depending on the time and where the markets are open at that time,” he said.
Credit: Source link
