With the recent launch of Canada’s first marine export facility for propane the country is set to attract a good share of the Asian LPG market, according to shipping consultancy Drewry.
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
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
“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 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.