AltaGas and Royal Vopak have reached a positive FID on the Ridley Island Energy Export Facility (REEF), a large-scale liquefied petroleum gas (LPG) and bulk liquids terminal with rail, logistics and marine infrastructure on Ridley Island, British Columbia, according to a news release.
The joint venture has completed all major gating items, including FEED and a detailed Class III capital estimate. Site clearing work is more than 95% complete and with required permits in hand, the project is expected to come online near 2026 year-end. Projected gross JV capital cost is $1.35bn, excluding governmental incentives and support, with annual partnership EBITDA of $185m – $215m.
The JV expects to lock-in more than 60 percent of the Phase 1 capital costs through fixed-price, lump-sum engineering, procurement and fabrication contracts prior to construction. Vopak and AltaGas expect to fund their 50 percent pro-rata ownership through each company’s respective financial capacity with no leverage at the partnership level.
With only ten shipping days to the fastest growing demand markets in Northeast Asia, REEF has a structural advantage in delivering LPGs to Asia with the shortest shipping time globally, the release states. REEF will be constructed and operate under AltaGas and Vopak’s existing exclusive rights granted by the Prince Rupert Port Authority to develop LPG, methanol and other bulk liquids exports on Ridley Island.
“This positive FID enables AltaGas to continue connecting Canadian energy to Asian markets and drive valuable outcomes for all our customers,” Vern Yu, President and CEO of AltaGas, said in the release. “Canada has a structural advantage in delivering LPGs to Asia with the shortest shipping time and lowest maritime emissions footprint. AltaGas delivers more than 19 percent of Japan’s propane and 13 percent of South Korea’s LPG imports, connecting our upstream customers with customers in Asia. We look forward to working with our partners to drive more long-term value creation with REEF.”
