Royal Vopak announced the execution of definitive agreements for a new 50/50 joint venture to further evaluate development of the Ridley Island Energy Export Facility (REEF), a large-scale liquefied petroleum gas (LPG) and bulk liquids terminal with marine infrastructure on Ridley Island, British Columbia, Canada, according to the company's release.
REEF, as part of the previously submitted regulatory filings (under the name of Vopak Pacific Canada), will have the capability to facilitate the export of LPGs, methanol, and other bulk liquids. REEF has been granted the key Federal and Provincial permits to construct storage tanks, a new dedicated jetty, and rail and other ancillary infrastructure required to operate a state-of-the-art and highly efficient facility. REEF would be developed on a 190-acre (77 hectare) site on lands administered by the Prince Rupert Port Authority for which the joint venture has executed a long-term lease that sits adjacent to AltaGas and Vopak’s existing Ridley Island Propane Export Terminal (RIPET), which has been in operation since April 2019.
Should REEF reach a positive final investment decision (FID), it is planned to be developed and brought online in phases. This approach will provide the most capital efficient build out of the project, match energy export supply with throughput capacity, mitigate the challenges that large development projects can have on local communities, and provide local construction and employment opportunities that would extend over longer time horizons. AltaGas has executed a long-term commercial agreement with the joint venture for 100% of the capacity for the first phase of LPG volumes, subject to a positive FID. AltaGas will also be responsible for the construction and operational stewardship of the facility. Future phases of the project will be developed as additional long-term commercial agreements and critical milestones are achieved to deliver the maximum value for all stakeholders.
With only ten shipping days to the fastest-growing demand markets in Northeast Asia, REEF will be able to efficiently connect Canada’s energy products to the world. This includes having an approximate 60 percent base time savings over the U.S. Gulf Coast, which requires a minimum 25-day shipping time to Northeast Asia, and approximately 45 percent base case time savings over the Arabian Gulf, which requires a minimum 18-day shipping time. This geographic advantage expands when there is significant congestion in the Panama Canal or when other global shipping pinch points experience disruptions. Furthermore, the Port of Prince Rupert provides REEF year-round ice-free operations and has the deepest natural harbour in North America, leaving it able to accommodate the world’s largest vessels, which ensures safe and reliable market access and allows AltaGas and Vopak to efficiently connect upstream and downstream markets.