JV for large

Dutch tank storage company Royal Vopak and North American energy infrastructure company AltaGas have announced the execution of definitive agreements for a new 50/50 joint venture (JV) to further evaluate the 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.

REEF is expected to have the capability to facilitate the export of LPGs, methanol, and other bulk liquids that are vital for everyday life, and according to Vopak, it is currently working through front-end engineering design (FEED) activities, which are expected to be completed by late 2023, followed by a FID by the JV.

According to Vopak, REEF has been granted the key federal and provincial permits to construct storage tanks, a new dedicated jetty, rail, as well as other ancillary infrastructure required to operate a state-of-the-art and highly efficient facility.

Vopak said the facility would be developed on lands administered by the Prince Rupert Port Authority for which the JV 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, Vopak said, adding that the 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.

Vopak informed that AltaGas has executed a long-term commercial agreement with the JV for 100% of the capacity for the first phase of LPG volumes, subject to a positive FID. Additionally, AltaGas will be responsible for the construction and operational stewardship of the facility.

To note, 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.

Vopak, AltaGas, and the Prince Rupert Port Authority have been working with First Nations rights holders and key stakeholders, including the local communities in Northwestern British Columbia and the Federal and Provincial regulators, to deliver the project, Vopak pointed out.

Dick Richelle, Chairman of the Executive Board and CEO of Royal Vopak, said: "We are excited to build on our success with AltaGas in Prince Rupert. Our goal is to create together with partners high-quality critical infrastructure for vital products. The strategic location of Prince Rupert, with the shortest shipping distances between North America and Asia, has the potential to increase the trade between Canada and the Asia Pacific region. REEF fits very well within Vopak's strategic pillar to grow in gas and industrial infrastructure. We look forward to further collaboration with First Nations rights holders and key stakeholders to make this project a reality."

Randy Crawford, President and CEO of AltaGas, stated: "Canada has a structural advantage in delivering LPGs into Asia from its world-class resources and through the shortest shipping time and lowest maritime emissions footprint… REEF fits our corporate strategy of operating long-life infrastructure assets that connect customers and markets and provide resilient and durable value for our stakeholders. We look forward to working with all our partners to achieving the remaining milestones required to reach a positive FID on the project."

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