Coal is loaded onto the bulk carrier Unicorn Ocean at Ridley Terminals, part of the Prince Rupert port system, on March 8, 2013.Robin Rowland/The Canadian Press
A B.C. coal terminal, formerly owned by the Canadian government, is suing a federal agency in an attempt to enforce a long-term lease and diversify exports.
Trigon Pacific Terminals Ltd. filed the lawsuit in B.C. Supreme Court, claiming that the Prince Rupert Port Authority (PRPA) has reneged on the lease, which would have allowed for new types of exports.
“The lease agreement constitutes a binding and enforceable contract,” Trigon said in its statement of claim.
None of the allegations have been proven in court. In its statement of defence, PRPA denies any wrongdoing.
Trigon has been seeking to diversify into liquefied petroleum gas such as propane and butane, hoping to broaden exports by reconfiguring its coal terminal on Ridley Island, located near Prince Rupert in northwestern British Columbia.
Trigon chief executive officer Rob Booker told The Globe and Mail in an interview in September that the company is keen to pursue other commodities. He said Trigon needs to diversify, citing the federal government’s announcement in 2021 that it plans to ban exports of thermal coal by 2030 as part of its climate initiatives.
Ridley Terminals Inc., a federal Crown corporation, formerly owned the export facility, but Ottawa sold it in 2019 to a group comprising two U.S. private-equity firms and two First Nations.
New York-based Riverstone Holdings LLC and AMCI Group of Connecticut own 90 per cent of Trigon, while the Lax Kw’alaams Band and the Metlakatla First Nation hold the remaining 10 per cent.
PRPA, which reports to federal Transport Minister Pablo Rodriguez, serves as the landlord for tenants such as Trigon.
Thermal coal, mostly originating from Alberta, is shipped from the Trigon site to Asia, where power plants use the coal to generate electricity.
Ottawa will still allow Trigon to export metallurgical coal, a key ingredient in making steel. Most of the metallurgical coal shipped to Asia by Trigon originates from northeastern B.C., notably from Conuma Resources Ltd.’s mines.
In its statement of claim, Trigon said PRPA decided to support expansion plans by another group, even though Ridley Terminals signed a lease valid until 2039, with a 20-year extension option, that allows for diversifying into other commodities.
Calgary-based AltaGas Ltd. ALA-T owns 70 per cent of a joint venture that already exports liquefied propane from Ridley Island, while Netherlands-based Royal Vopak, a storage tank company, holds the remaining 30 per cent.
AltaGas and Vopak, which started propane exports in 2019, sublease a portion of land from Trigon, separate from the coal terminal.
AltaGas and Vopak are equal partners in a new endeavour, with plans to construct an $885-million terminal on Ridley Island that would export liquefied petroleum gas, methanol and other bulk liquids. The new facility would be situated on land leased from PRPA and located next door to the existing propane terminal operated by AltaGas and Vopak.
Pembina Pipeline Corp. PPL-T opened a propane-export terminal in 2020 on nearby Watson Island, leasing property owned by the City of Prince Rupert.
In the court case, Trigon is focused on having its lease recognized as legally valid for the coal terminal.
“Trigon has suffered, and will continue to suffer loss, damage and expense as a result of the PRPA’s breach of the lease agreement,” according to the statement of claim.
PRPA’s statement of defence said AltaGas and Vopak have already invested an estimated $70-million over the past 10 years on preparations for their project, named Ridley Island Energy Export Facility.
PRPA also filed a counterclaim, saying Trigon knew or ought to have known that “time-limited exclusive rights” for liquefied petroleum gas are held by the 50-50 joint venture of AltaGas and Vopak.
The counterclaim alleges that Trigon acted in bad faith by issuing a news release in November with “false or misleading statements” about plans to redevelop the coal terminal. “Trigon does not have an unfettered right,” PRPA said.
Relief sought by PRPA in the counterclaim includes general damages for impaired reputation, as well as special damages.
Trigon believes there is room for a new propane entrant, and the company hired former AltaGas senior vice-president Dan Woznow earlier this year to lead diversification plans.
Those plans include building a second berth on Ridley Island in hopes of exporting hydrogen in the form of ammonia as the energy carrier. Trigon’s $163-million project is dubbed “Berth 2 Beyond Carbon,” or B2BC. Ottawa is contributing $75-million toward construction.
The goal is to have the second berth ready to start handling shipments in 2027, with the capability to export wood pellets, agricultural commodities and propane, as well as transporting hydrogen as ammonia.