Painted Pony gets 275% premium on propane thanks to new B.C. export terminal

It’s only been operating for two months, but Canada’s first marine propane export terminal has already proven its ability to boost results for struggling natural gas producers.

In late May, AltaGas celebrated the first Asia-bound shipment from its Ridley Island Export Terminal near Prince Rupert, B.C. Two additional cargos sailed in June, the company said on Thursday.

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The facility has ramped up to full capacity of 40,000 bbls/d, or 1.2 million tonnes per year, AltaGas said.

One of the producers sending propane through Ridley Island is Painted Pony Energy.

The company said it delivered over 800 bbls/d to the facility during the second quarter, and as a result achieved a 275 percent premium over the domestic market price.

According to Sproule and GTI, propane pricing in Alberta so far this year has averaged US$10.76/bbl compared to $32.77/bbl in the Asia-Pacific market and US$25.77/bbl at Mont Belvieu, Texas.

In August 2017 AltaGas signed an export agreement with Japan-based Astomos Energy for at least 50 percent of Ridley Island propane volumes.

The final capital cost of the project has not been disclosed, but it was previously estimated at $450 million to $500 million.

“RIPET is performing as expected, and we are seeing meaningful contributions from this asset,” AltaGas CEO Randy Crawford said in the company’s second quarter results statement, which included net income of $41 million, up from $1 million in the same period of last year.

A second marine propane terminal is being built nearby Ridley Island, by Pembina Pipeline.

Pembina’s Prince Rupert LPG project will have smaller capacity, at 25,000 bbls/d, which will be sourced primarily from its Redwater Complex near Edmonton.

The company said on Thursday that all materials for the terminal’s main sphere component are now on site and foundation construction has started for its sphere, rail yard track and plant.

The project, which is expected to be in service in the second half of 2020, is currently trending over its capital budget of $250 million, Pembina said. 

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