Prince Rupert Legacy (a subsidiary of the City of Prince Rupert) and Pembina Infrastructure and Logistics (a subsidiary of Pembina Pipeline Corporation) have signed a letter of intent (LOI) to construct a $125 million to $175 million liquid propane export terminal on Watson Island.

In its announcement, Pembina said assessments of the site indicate Watson Island is ideal for the development of an export terminal with a capacity of approximately 20,000 barrels per day of LPG export with an associated capital cost ranging between $125 million and $175 million.

Pembina expects a project timeline of two years from final investment decision. The project is subject to completion of design and engineering requirements, Pembina entering into appropriate definitive agreements, the receipt of necessary environmental and regulatory permits, and the approval of Pembina's board of directors.

"Watson Island has promising potential as an LPG export terminal location," Stuart Taylor, senior vice president, NGL & Natural Gas Facilities, said. "In light of our plans to develop a world-scale polypropylene production facility, the smaller export facility we are contemplating for Watson Island — utilizing smaller ships and ensuring very competitive per-unit export facility costs — makes good sense for Pembina."

Mick Dilger, Pembina president and CEO, also stated that Watson Island is an encouraging location on which to do business.

“Watson Island has great potential as a LPG (liquefied petroleum gas) export terminal location. Early impressions of the site are promising, and we’re happy to be working with the City of Prince Rupert,” Dilger said.

Pembina said Watson Island's sheltered berth and existing dock are adequate for activities associated with LPG export. The company also noted rail connections between its facilities in Redwater, Alberta and Watson Island, while also offering efficient shipping routes to Asian, North, Central, and South American markets were key factors on the decision.

In support of this project, Pembina has already secured a long-term export permit.

“We are looking forward to a new beginning for our community as we work toward putting Watson Island back on the tax roll,” Prince Rupert Mayor Lee Brain said.

“Pembina is a Canadian company with a proven track record for supporting the communities in which they operate and has an industry-leading history of operating safely. We are happy to have the opportunity to potentially partner with them to create new local jobs and revenue that will significantly improve the quality of life for everyone in Prince Rupert.”

Pembina will now conduct preliminary technical assessments and feasibility studies of the site, engage with area First Nations and stakeholders and work toward a future final investment decision (FID). A timeline for a potential FID was not announced.

The LPG export terminal is slated to take up only a portion of the 280-acre Watson Island site. The city has leased a portion of the site to Prince Rupert Legacy Inc. for other future commercial operations.