Ridley Terminal

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Ridley Terminal is a large coal export facility at Prince Rupert Port in British Columbia, Canada. It is operated by Ridley Terminals, a Federal Crown Corporation owned by the government of Canada.

The terminal was built specifically to export metallurgical and thermal coal from the northeastern part of the province.[1] The terminal has an annual capacity of 18 million tonnes of coal per annum (mtpa).[2]

Location

The terminal is located at Prince Rupert Port on Kaien Island in western British Columbia’s Chatham Sound.

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Project Details

  • Owner: Ridley Terminals Inc.
  • Location: Prince Rupert Port, Kaien Island, British Columbia, Canada
  • Capacity (Million tonnes per annum): 18
  • Status: Operating
  • Start year: 1983
  • Type: Exports
  • Source of Coal: British Columbia
  • Cost of expansion:
  • Financing for expansion:

Background

Established in 1983, the construction of Ridley Terminals was a joint venture between the Federal Government and Federal Commerce & Navigation, in support of coal developments in northeast British Columbia. In 1991 the Federal Government became sole owner of the terminal, making Ridley Terminals Inc. a Federal Crown Corporation. RTI received its first train of coal in November 1983, and the first ship, the Shoryu Maru, was loaded on January 7, 1984. The official opening of Ridley Terminals was on June 8, 1984. The total tonnage shipped from RTI in 1984 was 5.5 million tonnes.[3]

By 2011, the Ridley facility had the ability to process 12 million metric tons of bulk commodities annually, and the terminals can store one-tenth of that amount, 1.2 million tons, on-site. Coal accounted for 83 percent of Ridley’s total volume in 2010.[4]

It was announced in September 2011 the Port at Ridley Island was planning on doubling its coal carrying capacity to 24-30 million tonnes, adding a third stacker and increasing the size of the port by 14 hectares.[5][6] Shortly after, Ridley announced export deals with Arch Coal, Black Hills Corporation and Cloud Peak Energy, all of which operate coal mines in the Powder River Basin.[6]

The port increased traffic by 17 percent in 2011,[7] and unloaded 11.7 mt in 2013. However, coal exports fell 41 per cent in 2014 to 7 million tonnes (Mt). This was partly due to the decision by Walter Energy to temporarily idle three coking coal mines in east-central BC that were key exporters through Ridley. Walter Energy has been the largest user of the Ridley Terminal since its acquisition of Canada's Western Coal in April 2011.[8]

In 2015 it was announced that the terminal's plan to expand its annual capacity to 25 million tonnes had been postponed until at least 2019. Ridley terminals said that an expansion to 18 Mtpa would be high enough for Ridley to handle demand for shipments until the end of 2019.[8]

As of 2018 the terminal has an annual capacity of 18 million tonnes of coal per annum (mtpa).[9]

Coal deals

Arch Coal signs coal export lease

On January 18, 2011, Arch Coal signed a coal-export agreement with the Prince Rupert Port in the same week it reported buying a 38% ownership stake in a coal loading facility planned for Longview, Washington, the Millennium Bulk Logistics Longview Terminal. Both are for the company to secure shipping access to Asian markets. Arch Coal signed a five-year agreement to export up to two million tons of coal in 2011 from Prince Rupert, B.C., and up to 2.5 million tons of coal a year in 2012 through 2015.[10]

The deal was signed with Ridley Terminals Inc., a port operator owned by the Canadian government with 12 million tons of annual coal-export capacity. International demand for U.S. coal has increased as supplies from Australia - the world's No. 2 thermal-coal exporter after Indonesia - were disrupted by massive floods in 2010 in the country's eastern, coal-producing region.[10]

Ridley also signed smaller coal contracts in 2010 with U.S. coal producers Cloud Peak Energy and Black Hills Corporation. Together, the three American contracts represent about 40 percent of capacity at Ridley, according to the Mining Association of British Columbia. Canada coal companies such as Teck Resources, Western Coal, and Grande Cache say the Crown corporation's decision to award long-term contracts to three U.S. companies will clog the already busy port, and jeopardize their plans for coal export expansion.[11]

Western Coal

In February 2011, Western Coal signed an amended terminal services agreement with Ridley Terminals Inc. to expand the coal company's production levels at its facilities in Canada. The company exports most of its metallurgical coal to Asia-Pacific markets to meet the growing demand by steel makers.[12]

However, Western Coal owner Walter Energy later decided to temporary idle three coking coal mines in east-central BC that were key exporters through Ridley.[8]

Coalspur

The planned expansion at Ridley Terminals was also designed to accommodate increasing production and exports of Coalspur’s Vista coal project in Alberta. Coalspur is a coal development company with coal leases in the Hinton region of Alberta. Coalspur’s flagship project, the Vista coal project, is intended to produce 6 million tonnes per annum (mtpa), and to be expanded to 12 Mtpa, which would make it the largest steam coal export project in the country. Coalspur has secured export allocation of up to 13.5 Mtpa through two agreements with Ridley Terminals, with 10 Mtpa committed and the option for an additional 3.5 Mtpa. The agreements were in place for 14 years with an option to extend for seven more. In May 2014, Coalspur announced that construction of the project, which was due to start in June 2014, would be delayed due to funding issues and challenging market conditions. In March 2015, K.C. Euroholdings (KCE) bought Coalspur and said it plans to move the Vista project forward.[8]

Cloud Peak and Westmoreland

In 2014 Cloud Peak Energy and US Colorado-based producer Westmoreland Coal signed an agreement involving transfer of rights, under which Cloud Peak Energy acquired the contracted capacity at Westshore Terminals of Westmoreland Coal, allowing Cloud Peak to increase its annual exports through Westshore to 5.4-5.9 million tonnes (Mt) starting in 2015 and 6.3-6.8 Mt in 2019, from a projected 3.6-4.1 Mt in 2014. In exchange, Westmoreland will instead export production from its Coal Valley Mine in Alberta through Ridley Terminals.[8]

Efforts to privatize the coal port

In March 2010, it was reported that a consortium of major B.C. coal and lumber companies and several investors appeared ready to buy the Prince Rupert coal terminal - Ridley Terminals - from the federal government. Ridley Terminals made $25 million in revenue in 2008. B.C. coal firms operating out of the region include Peace River Coal and Western Coal, both members of Ridley Terminals.[13] By January 2011, however, the port was still a Crown corporation, with the decision to award port capacity to US coal companies like Arch Coal creating tension with Canadian coal companies, who say the move will choke off their coal export capacity.[11]

Coal dust near Prince Rupert Port

In an attempt to relieve complaints near the port that coal dust was making nearby homes dirty, Ridley Terminals in October 2011 said that it was taking measures to be a good corporate citizen and good neighbor to local residents. It was reported people affected by coal dust can fill out a form if they have been affected by coal dust and a contractor will power wash off the homeowner's property. Critics say that washing off the coal dust is not enough, as it has severe effects on human health by simply being airborne.[14]

Petcoke

In December 2015 Canadian energy company Suncor said it planned to suspend for 2016 its marketing of petcoke produced at its refinery in Fort McMurray, Alberta, saying costs to move petcoke to market had gone too far above current pricing. Suncor ships most if not all of the roughly 1 million tonnes of petcoke from its Fort McMurray and Edmonton refineries through Ridley, which is typically sold into the Japanese aluminum market. With the suspension of McMurray, Ridley is expected to export between 250,000-300,000 tonnes of petcoke in 2016 from the Edmonton refinery.[15]

Resources

References

  1. Clark Williams-Derry, "Ridley’s Coal Exports: A Terminal Illness? Dismal financial results for BC's coal export terminal," Sightline, June 5, 2015
  2. "Operations," Ridley Terminals, accessed Jan 2018
  3. History, Ridley Terminals, accessed Jan 2018
  4. "Coal Exports From Canada" Sightline Institute, August 3, 2011.
  5. "Growth strategies go west" Port Strategy, September 13, 2011.
  6. 6.0 6.1 ["British Columbia export terminal can more than double capacity: official" Steve Hooks, Platts.com, September 19, 2011.
  7. "PRPA figures show traffic through Prince Rupert in 2011 up from 2010" Shaun Thomas, TheNorthernView.com, January 8, 2012.
  8. 8.0 8.1 8.2 8.3 8.4 Sylvie Cornot-Gandolphe “US Coal Exports: The Long Road to Asian Markets,” Oxford OIES PAPER: CL 2, March 2015
  9. "Operations," Ridley Terminals, accessed Jan 2018
  10. 10.0 10.1 Edward Welsch, "Arch Coal In 5-Yr Asia Export Pact With Canada's Ridley Port" Wall Street Journal, Jan. 18, 2011.
  11. 11.0 11.1 "Coal producers decry Ridley Terminals decision" Investor Vortex, Jan. 25, 2011.
  12. "Western Coal Announces Terminal Services Agreement with Ridley Terminals" PR Newswire, Feb. 7, 2011.
  13. George Baker, "B.C. companies appear poised to buy Prince Rupert coal terminal from feds" Product Design and Development, March 22, 2010.
  14. "How Real Is the Threat of Coal Dust?" Eric de Place, Sightline.org, October 4, 2010.
  15. "Suncor halts 2016 petcoke shipments from Fort McMurray," Platts, Dec 9, 2015

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