Geotechnical work underway at proposed Kitimat propane terminal

The company that wants to build a propane export terminal at Kitimat is conducting geotechnical work just north of the municipality.

They want to see if the location is suitable for a key portion of the project: a railyard along the CN line at which railcars carrying the fuel would be parked and the fuel then transferred to a pipeline for shipment to the proposed terminal site across the water from Kitamaat Village.

Pacific Traverse Energy received a two-year exploratory licence just this fall from the provincial government and its geotechnical work on provincial Crown land is on schedule, says company official Jon Turner.

At the same time, the company has now received a 25-year propane export licence from the National Energy Board to ship as much as 16 million barrels of propane a year to Asian customers, he says.

“Receiving the licence to export is an important step for the project as it confirms that Canada has sufficient propane to meet domestic need and allows us to export surplus to Asian customers,” Turner added.

The pipeline to the terminal would be approximately 15 kilometres long and the terminal would feature a floating propane storage vessel.

“We continue to work closely with the Haisla Nation and we are also engaging with key stakeholders including the District of Kitimat. We will be seeking and listening to public input as we develop the project – it will be a focus for us beginning in early 2019,” Turner says.

The potential railyard location now being examined is one of two location options — the other is just south of the first location on land owned by Rio Tinto.

The terminal would be built on Haisla-owned land and while the Haisla Nation has yet to formally agree to the project, it did sign an agreement with PTE in May with a provision that a lease would be triggered based on the company making a final investment decision.

“Upon securing necessary permits and executing the lease, [the] Haisla Nation will provide Pacific Traverse Energy with their consent to construct and operate the project in Haisla Nation Traditional Territory,” reads a company application made to the province for the two-year investigative railyard location licence.

Based on its projected export volume, propane from as many as 60 railcars a day would be emptied at the company’s planned railyard and the railyard would hold between 200 to 300 cars.

The company must still line up financing for its project company and sign up customers to use its terminal.

While Pacific Traverse is billed as a BC-based company, it is wholly-owned by Spire Holdco, a US-based logistics and energy company with offices in Denver, Colorado.

Pacific Traverse has been exploring its project potential for two years, intensifying its efforts in 2017 with a series of meetings with the Haisla and the District of Kitimat.

It has also been meeting with Kitimat LNG, LNG Canada and BC Hydro, the latter being the supplier of power for its facilities which include processes to super-cool the propane for export.

If successful, Pacific Traverse would be the second company to operate a propane export terminal in the Northwest. The first is the AltaGas/Vopak terminal already under construction at Prince Rupert, which is designed to ship 1.2 million tonnes of propane per year, slightly less than the Pacific Traverse project.

Pacific Traverse cites a favourable sailing distance from the north coast to Asian markets as a key economic factor for prospective customers.

The company’s project schedule calls for a final investment decision in late 2020, followed by a two-year construction window with operations beginning in 2022 for 30 years.

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