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PRINCE RUPERT, B.C. – A federally owned coal-shipping operation in northern British Columbia is placing its expansion on hold for up to five years, getting only halfway toward its goal to double the terminal’s capacity.
Ridley Terminals Inc., a Crown corporation put up for sale by Ottawa nearly two years ago, has been ramping up its capacity in anticipation of increased coal exports to energy-hungry customers in Asia. Some industry observers estimate Ottawa might have been able to fetch $1-billion had the government sold the operation in early 2013.
But as coal prices spiralled downward over the past couple of years, producers vastly scaled back or cancelled exports. Interest among prospective buyers of Ridley has waned and the terminal’s market value declined. In less than two years, Ridley has gone from scrambling to keep up with surging demand to now having excess capacity – plenty of new equipment but dwindling supplies of coal that arrive in railcars at the Port of Prince Rupert.
During a tour last week, no ships waited to be loaded at the Ridley berth, and some conveyors used to help stockpile coal were halted. Ridley, which loaded its first coal ship in 1984, leases land from the Prince Rupert Port Authority.
In early 2011, Ridley had shipping capacity of almost 12 million tonnes annually before embarking on a $255-million, multiyear expansion in an effort to reach 25 million tonnes a year by the end of 2015. After the initial phases of construction, the terminal’s capacity rose to 15 million tonnes annually in 2013 and is targeted to be at 18 million tonnes annually by the end of 2014.
But the expansion will be suspended for up to five years once it hits 18 million tonnes of annual capacity, disrupting Canada’s hopes for a coal exporting bonanza from the Ridley site to Asia. That annual throughput for coal and petroleum coke is expected to be high enough for Ridley to handle demand for shipments until the end of 2019, Ridley chairman Byng Giraud said in an interview.
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