Ridley Island Petroleum Export Terminal on track to hit export target by year end

Despite some financial hedging in the first quarter and the challenges of the new economic order from COVID, AltaGas has reported some positive trends from the Ridley Island Petroleum Export Terminal on the North Coast.

The Alberta energy company outlined the state of the terminal as part of their First Quarter update in late April, a document that highlighted the impact that the COVID-19 emergency has had on the industry and the company itself.

President  and CEO Randy Crawford charts the challenges that the last six weeks have provided for as part of the update.

"Over the last several weeks, the world dramatically changed around us. Communities have been brought to a stand-still, businesses abruptly came to a halt and families are forced to adapt to a new normal. I want to extend our deepest sympathies to all those who have been personally affected by the pandemic. We remain focused on doing our part by continuing to provide our essential services and continuing to deliver reliable energy to our customers. I would like to thank our employees for their dedication, adaptability and hard work during this pandemic. Our people are the heart of this Company and their resilience and spirit gives me confidence that we can deliver on all of our commitments to all of our stakeholders.

Despite the challenges created by COVID-19, our first quarter financial results reflect the stability and resiliency of our core businesses. Our Utilities and Midstream businesses continue to perform well, providing predictable and reliable earnings despite the disruption to global markets. Our first quarter reflects strong operating performance, excluding the impact of lost EBITDA from 2019 asset sales, our core businesses normalized EBITDA increased more than 11 percent year-over-year. The earnings were largely underpinned by our Utilities, which accounted for approximately 75 percent of normalized EBITDA. Our Utilities segment is expected to contribute approximately 60 percent of full year 2020 normalized EBITDA."

For the North Coast, the synopsis was a positive review, making note of a schedule out of Prince Rupert of two shipments to Asian markets per month from January to March. In their update, Alta Gas noted that the Prince Rupert facility is on target to its goal of 50,000 barrels of LPG per day.

RIPET contributed $27 million of normalized EBITDA in the first quarter of 2020 on exports of 35,141 Bbls/d for delivery to Asian markets. The facility averaged two ships per month for the first quarter with deliveries modestly impacted by rail blockades experienced in February. 

RIPET's first quarter normalized EBITDA was negatively impacted by a $6 million realized hedge loss on supply volumes exported in April. Excluding the timing impacts of the realized hedge loss in March, first quarter normalized EBITDA from RIPET would have been $33 million or approximately $10 per barrel. 

The $6 million realized hedge loss is anticipated to have a positive impact on the second quarter margins and results in lower inventory costs. 

AltaGas remains on track to hit its 50,000 Bbls/d export target through RIPET by year end.

You can review the full report by AltaGas here.

Alta Gas is one of two LPG providers on the North Coast, as we noted last week Pembina, which is currently on pause for their construction of the Watson Island terminal, announced that the In Service date for their shipping operations has now been delayed to the first quarter of 2021 owing to the COVID situation.

For more notes related to the Ridley Island facility see our archive page here.