AltaGas signs supply agreement with Japan's Astomos Energy

The proposed LPG Terminal at
Ridley Island already has its
first International customer

Alberta based AltaGas has announced the first major contract to deliver Liquefied Petroleum Gas out of the proposed Ridley Island terminal, with the energy company entering into a Memorandum of Understanding with Astomos Energy of Japan.

AltaGas outlined some background to the terms of the multi-year agreement today, an arrangement which will see Astomos purchase at least 50 percent of the anticipated 1.2 million tonnes of propane to be made available through the Export Terminal each year. 

"The long-term Agreement with Astomos is a major step in underpinning development of our Ridley Island Propane Export Terminal, Canada's first propane export terminal. This Export Terminal is one of the key building blocks of our strategy to build out natural gas processing and liquids separation capacity in the Montney formation, a leading North American gas play." -- David Harris, President and Chief Executive Officer of AltaGas. 

The AltaGas CEO also noted how the agreement will provide benefits for the larger vision of the company and its export plans through Prince Rupert.

"The additional processing capacity we are building and connectivity to the Export Terminal provides upstream energy producers with unparalleled access at the most competitive rates to these premium markets. Market diversity, including global markets outside Canada, is a key step forward for Canadian producers. We look forward to working closely with Astomos, one of the largest LPG players in the world, and with producers to maximize their profitability." 

No financial details related to the agreement were released in today's information statement.

The Ridley Terminal proposal is currently in the environmental review process, with AltaGas expected to make a final investment on the 500 million dollar Terminal sometime later this year.

The announcement of the supply agreement with Astomos Energy should help AltaGas towards that final investment decision.

As part of that process, AltaGas recently held two information sessions in Prince Rupert and Port Edward to outline their plans for the development of the Ridley Island site for LPG shipments.

It's anticipated that if approved, the Terminal would be in operation by 2018.

The announcement of the supply agreement with Astomos Energy should help AltaGas towards that final investment decision.

Giant LPG carriers could be calling on Prince Rupert in 2018,
as Japan's Astomos Energy signs a supply MOU with
AltaGas for shipments out of Ridley Island
(photo from Astomos website)

Astomos  is a joint venture between Idemitsu Kosan Ltd. and Mitsubishi Corporation and is considered one of the largest LPG companies in the world, the company handles in excess of 10 million metric tons of LPG annually, operating a fleet of 21 Very Large Gas carriers.

You can learn more about Astomos Energy from the company website here.

You can review more on today's supply agreement from this media announcement.

For further background on the proposed LPG Terminal proposed for Ridley Island see our archive page here.

Cross posted from the North Coast Review