altagas-facility-rendering.jpg credit AltaGas Ltd.): ArtistÕs rendering of AltaGas LtdÕs planned B.C. propane export terminal on Ridley Island in the Port of Prince Rupert. Source: AltaGas Ltd. rb-cd-altagas-propane For brent Jang
Altagas Ltd. is touting a supply deal with Japan's Astomos Energy Corp. to export propane from Canada's West Coast as a sign that major projects can still get built in the region.
Calgary-based Altagas on Tuesday said the arrangement would see Astomos buy half of the 1.2 million tonnes of propane shipped each year from a terminal under construction at Ridley Island, B.C.
Astomos, co-owned by Idemitsu Kosan Co., Ltd. and Mitsubishi Corp., is one of the world's largest transporters and purchasers of so-called liquefied petroleum gas, effectively super-cooled propane and butane.
The deal with Altagas comes a week after Malaysia's Petronas scrapped plans for a much larger liquefied natural gas project proposed for the northern coast, underscoring hurdles to building multibillion-dollar export facilities on the rugged shore.
In abandoning the $11.4-billion Pacific NorthWest LNG development, state-run Petronas cited a combination of high costs and weak global markets for the fuel.
Altagas agreed to build the plant at Ridley Island earlier this year, pegging the cost around $500-million. Company chairman David Cornhill said Tuesday the investment is supported by strong markets for propane in countries such as Japan and India.
Unlike the Petronas development, Altagas said its project would benefit from pre-existing infrastructure at Ridley Island, including an established port and rail lines to transport propane to the coast from production facilities in northeastern B.C. and Alberta. The facility is due to start up in early 2019.