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Drilling activity could rise with AltaGas propane export terminal

Industry group not so sure
The site of AltaGas's proposed propane export terminal.

A propane export terminal on B.C.’s West Coast will give producers new access to world markets, but an industry group says it’s too early to say what impact the project will have on Northeast B.C.

On Jan. 3, AltaGas announced its plan to build a $450-$500 million propane export terminal on Ridley Island near Prince Rupert—the first such facility on Canada’s Pacific coast.    

Half of the 1.2 million annual tonnes of propane will be sourced from AltaGas’s Townsend facility north of Fort St. John, which the company announced it was upgrading late last year.

“Talking to the producers, things are kind of getting landlocked up there in the northeast, so anything that provides another outlet for one of their commodities is a huge advantage,” said Dan Woznow, AltaGas vice president of energy exports. “This is one portion of the gas, the propane, but if (producers) can get a higher value for that, that may open up other opportunities for drilling in the upstream.”

The Ridley Island facility will be just ten days from Asian markets, compared to 25 days from competing facilities on the U.S. Gulf Coast. AltaGas operates a similar propane export facility in Ferndale, WA.

While the terminal, will provide an outlet for Northeast B.C. propane, Energy Services B.C. Executive Director Art Jarvis said it was too early to say what impact the facility will have on the region.

The facility will be supplied by rail and road instead of a fixed pipeline, meaning AltaGas will source the remainder of its product wherever it can get the best price.

“It’ll be all about price, wherever they can buy that propane the cheapest,” said Jarvis, whose organization represents energy industry contractors in Northeast B.C. “As for local impact, we won’t see that until we see what the market is doing and where the price is going.”

Local leaders have stressed the need to find other outlets for the regions natural gas and other commodities should the province’s liquefied natural gas plans stall. AltaGas decided to shelve its Douglas Channel LNG project last year due to low prices.  

Construction on the Ridley Island facility is expected to start this year. It will create 200 to 250 construction jobs, as well as 40 to 50 permanent jobs.

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