Pembina Pipeline planning to build LPG export project in Prince Rupert area
CALGARY Pembina Pipeline Corp. plans to build a propane export terminal in Prince Rupert, B.C., where major liquefied natural gas export projects have stalled in recent years.
Pembina announced Tuesday it would conduct a feasibility study and begin engineering and design work on a $125 million to $175 million liquefied petroleum gas terminal on the site of an old pulp mill on the West Coast near Prince Rupert, scrapping previously announced plans to build the terminal in Portland, Ore.
If built, the project would become the second LPG export terminal in the Prince Rupert area, which is also home to four LNG export terminal proposals — though none of those LNG projects have been sanctioned or built years after being announced.
BG Group’s LNG project has been suspended after the company’s merger with Shell; Petronas Bhd is reportedly looking for a new site for its LNG project; and both Nexen and Imperial have yet to announce sanctioning decisions for their projects.
The area’s LPG projects, which would be built to send propane to Asia and other overseas markets, could be more near-term developments as the global LPG market is set to grow to US$147 billion by 2024, according to San Francisco’s Grand View Research.
Stuart Taylor, Pembina senior vice-president of natural gas liquids and natural gas facilities, said the company would work on engineering and consulting with local communities over the next six to 12 months before bringing a proposal to its board. He said the terminal could be built within two years of a sanctioning decision.
“One of the things that we’re excited about is the cost,” Taylor said, noting that the project would be built on an existing but abandoned industrial site with an existing unused shipping berth. He said the site is also connected to a CN rail line, which would allow Pembina to ship in propane for processing and export.
The City of Prince Rupert took possession of the site on Watson Island years ago when the local pulp mill closed and successive municipal governments have looked for ways to remediate and reuse the land. The pulp mill had also been a major employer in the city, whose population declined after it closed.
“We are looking forward to a new beginning for our community as we work toward putting Watson Island back on the tax roll,” Prince Rupert Mayor Lee Brain said in a press release. “We are happy to have the opportunity to potentially partner with (Pembina) to create new local jobs and revenue that will significantly improve the quality of life for everyone in Prince Rupert.”
Calgary-based AltaGas Ltd. announced in January that it would build the West Coast’s first LPG export terminal nearby, on Ridley Island, at a cost of between $450 million to $500 million to send Canadian propane to Asia.
Propane production has increased rapidly in Canada and the United States in recent years as natural gas producers have tapped into more shale formations.
Propane is a byproduct of shale natural gas production and domestic producers have been looking for new markets for it since Canadian propane has lost market share to growing U.S. supplies in key petrochemical markets.