Geotechnical work is being conducted by Vancouver-based energy company Pacific Traverse Energy for a proposed railyard north of Kitimat as part of a project to build a propane processing facility along the Bish Cove road.
The railyard, which would be located three kilometres from the northern end of the Service Centre, will be used to park special railcars carrying propane from northeastern B.C. and Alberta on CN tracks to the rail terminus in Kitimat for offloading.
The project will also see the construction of a nearly 15km-long small diameter pipeline to transport the propane through the Service Centre, past Rio Tinto’s plant to the facility where it will be super-cooled, pumped to a floating storage vessel and transferred to as many as three tankers a month destined for clients in Asia.
Pacific Traverse spokesperson Jon Turner said the geotechnical work, which is being conducted on Crown land, falls under the perview of a two-year exploratory licence issued by the provincial government this fall.
Turner said the company has also been issued 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.
“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,” Turner added.
The pipeline to the terminal would be approximately 15 kilometres long and the terminal would feature a floating propoane 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 said.
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.
Turner said the geotechnical work involves drilling to determine “material strengths and material samples at depth” and the “installation of pore pressure measurement instrumentation to select boreholes to measure groundwater levels and measure pressures at depth.”
The company must still line up financing for its project 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 a 30-year period.