Canada to Secure Bigger Share of Asian LPG Market with New Terminal
Altagas’s Ridley Island Export Terminal (RIPET), located in Prince Rupert, British Columbia, dispatched its first cargo on May 23, 2019 aboard the VLGC Sumire Gas for delivery to Japan’s Kyushu LPG Fukushima terminal.
Drewry said that, with the commencement of operations at RIPET, the total voyage time on a Prince Rupert to Chiba trade will be just 10 days, compared with 25 days for a voyage between Houston and Chiba, via the the Panama Canal.
“Hence RIPET has the potential to have a l negative impact on LPG tonne-mile demand,” Drewry said.
The total capacity of the terminal is 1.2 million tonnes per annum, which translates to two VLGCs per month on average.
Canada’s share in LPG seaborne trade will increase with the commencement of exports from RIPET, and consequently, the country will try to cater to the biggest LPG consumers.
“A rise in Canadian LPG production will also impact Asian LPG imports from other regions. In our view lower shipping costs and increased competitiveness of Canadian LPG with that of the US and Middle East will favour the former.”
The opening of the facility will also be of benefit to China, which is actively seeking different sources of LPG with the recent escalation in the U.S.-China trade war, Drewry added.
Although RIPET is important, major changes in demand for VLGCs are not expected. However, the terminal is set to impact LPG pricing, as it will lead to an increase in the outflow of Canadian and U.S. LPG supplies, thereby strengthening West Canada and Mont Belvieu LPG prices.