Calgary-based Pembina Pipeline Corp. said it plans to develop a west coast liquefied petroleum gas (LPG) export terminal on Watson Island in Prince Rupert, B.C.

Pembina has signed a non-binding letter of intent with Prince Rupert Legacy Inc., (a wholly-owned subsidiary of the City of Prince Rupert) for the company to develop what it calls West Coast Terminal on lands wholly owned by Prince Rupert Legacy.

Under the LOI, Pembina has commenced site assessment and engagement with key stakeholders including aboriginal communities. Initial assessments of the site indicate it is ideal for the development of an export terminal, according to the company, 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," said Stuart Taylor, senior vice president, NGL and natural gas facilities. "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."

Pembina has been working towards the development of an LPG export terminal served by a national railway on the west coast of Canada for the past several years in anticipation of and response to the step change in LPG productive capability of the Western Canadian Sedimentary Basin. Pembina said its objective with this project is to provide growing Canadian LPG supply with access to diverse, international markets, while complementing Pembina's expanding integrated service offering for energy products derived from natural gas.