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Project Description1. Project Overview and LocationThe proposed propane export facility (the Project) is located on British Columbia’s (BC) North Coast,9 kilometers south of the City of Prince Rupert. The Project is on Ridley Island on federal port landadministered by the Prince Rupert Port Authority (PRPA) that is leased to Ridley Terminals Inc. (RTI)(Figure 1). The RTI site is accessible by road (Highway 16), rail (Canadian National Railway (CN))and by marine cargo carriers using shipping lanes accessing the Port of Prince Rupert.Land to the north and east of Ridley Island is forested mountain of Kaien Island between the port andthe city of Prince Rupert. Porpoise Harbour is connected to Chatham Sound between Ridley and LeluIslands, and to Wainright and Morse Basins to the east.Ridley Island falls under the Port of Prince Rupert 2020 Land Use Management Plan (2010) thatdesignates zoning for industrial and port terminal development, including the provision for dry andliquid bulk terminals. PRPA land is leased to RTI and supports a fully operational coal terminal built in1983. The entire RTI lease occupies an area of about 400 acres (including water lot lease areas).The Project is to be located on the southwest corner of the RTI lease area on a small 24 acre (9.7 ha)parcel of land as shown in Figure 2. A close up aerial view of the Project area is provided in Figure 3.The existing RTI terminal consists of a rail loop and rotary railcar dumper, coal stockyard and reclaimsystem, berth with dual quadrant ship loading system, partially completed liquid sulphur storage andtransfer system, wood pellet railcar unloading, storage and export system, and stormwater treatmentsystem. The Project will be independent from the existing facilities at RTI. However, the Project willutilize common facilities (e.g. the jetty and rail yard) as necessary for construction and operation. Thepropane storage facility will be located on land sub-leased from RTI, whereas the sharedinfrastructure, including rail offloading structures and the jetty will be on RTI land.The Project’s sub-leased site is currently occupied by a partially completed sulphur export facility(Figure 3). Sulphur Corp of Canada started construction of the sulphur facility in 1999; however thefacility was never fully commissioned and was never used for storage, import or export of sulphur orany other product. The infrastructure that was built for the sulphur facility includes two above ground15,000 tonne molten sulphur storage (API 650) tanks, piping and pipe racks, loading racks and pumphouse, as well as settling ponds used to address water runoff from the coal export facility locatedadjacent to the site. In order to construct the Project, the sulphur facility will be dismantled andremoved.The Project will receive pressurized liquid propane via rail, which will be transferred to intermediatepressurized storage bullets. The propane will then be chilled, and transferred to refrigerated storageat atmospheric pressure. The cooled propane will be transferred to Very Large Gas Carriers (VLGC),using the existing RTI coal jetty, for transport to Asia and other markets. The Project will include up to20 rail unloading racks located on the Project site, loading arms on the existing berth, gas generation,cooling equipment, and associated piping (all located on the Project site) which will allow foranticipated throughput of approximately 1.2 million tonnes per annum. There may be someequipment to ensure ethane content meets the product specifications of the buyer. Final equipmenttypes and sizes will be determined during the next phase of engineering as optimization of the Projectdesign continues. Based on the preliminary design, the Project expects to offload approximately 50-Page 8January 20, 2016Ridley Island Project

Project Description60 rail cars per day, and to deliver by marine transport approximately 20-30 cargos of propane a yearto market.The primary components associated with the propane export facility include (see Figure 4):Page 9 Modification to rail and switching on PRPA land leased to RTI designated for rail use. Rail tank car unloading facilities and associated equipment on the Project site. Product storage including pressurized bullets and large full containment atmospheric storagetanks on the Project site. Refrigeration and boil off gas recovery systems on the Project site. Ship loading facilities on RTI’s existing coal export marine jetty. On-site utilities including power generation, connection to the grid, and distribution on theProject site. Safety systems including ground flare, fire and gas detection, spill response and firesuppression on AltaGas and shared facilities, including the rail yard, offloading arms, storage,piping, and jetty. Project control systems, ancillary support services and required buildings.January 20, 2016Ridley Island Project

Project DescriptionFigure 1 - Project LocationPage 10January 20, 2016Ridley Island Project

Project DescriptionFigure 2 - Land Tenure on Ridley IslandPage 11January 20, 2016Ridley Island Project

Project DescriptionFigure 3 - Aerial View of the Project site.Page 12January 20, 2016Ridley Island Project

Project DescriptionFigure 4 - Project ComponentsPage 13January 20, 2016Ridley Island Project

Project Description1.1Project JustificationLike natural gas, propane is a gas at room temperature and normal atmospheric pressure. Theprocess to turn propane into a liquid for shipment is similar to converting natural gas into LNG, but issimpler and requires much less equipment and energy. Shippers convert propane into a liquidbecause it is much easier to transport liquids than gases. There are numerous propane export andimport facilities around the world that have been operating safely and reliably for decades.Propane has been produced and consumed in North America for decades, and has well-established,developed markets and infrastructure to support it. The United States has traditionally hosted bothimport and export facilities for propane, and became a net exporter of propane for the first time in2012. Current export facilities are located at Ferndale, Washington (owned by an AltaGas affiliate);Mont Belvieu, Texas; and Marcus Hook, Pennsylvania. Most of Canada’s propane exports currentlygo to the United States by pipeline, truck or rail. Propane facilities in BC consist mainly of rail andtruck receipt terminals that serve as distribution centers to feed retail markets.The largest source of propane in North America is the production of natural gas. Changes in naturalgas drilling technology coupled with higher prices for propane have resulted in a large increase inpropane supplies in western Canada. New drilling techniques have opened the development ofnatural gas trapped in what were previously inaccessible shale formations. Higher returns oninvestment from natural gas with a high propane content led producers to focus their natural gasdrilling on those formations that are also rich in propane and butane. Targeted drilling in BC andAlberta is expected to substantially increase the supply of propane, and result in a surplus for theregion. AltaGas believes a propane export facility is required in Canada to alleviate the increasedsupply of propane. This need will be heightened if LNG export facilities are developed in BC.As detailed in ‘Strategic Outcomes and Program Alignment Architecture: 2013-2014’ NaturalResources Canada (2014) has several objectives related to energy development. These objectivesinclude: facilitating investment and capitalizing on the potential to stimulate jobs and growth throughresponsible resource development, while also maintaining strong environmental protection; toimprove the alignment of federal and provincial regulatory processes and to ensure effective andmeaningful consultation with First Nations people; to manage energy resources and infrastructure tocontribute to the broader economy; and the development of new energy supply. The propane exportfacility proposed by AltaGas provides an excellent opportunity to fulfill all of these goals. Creatingnew markets for Canadian propane will also help energy producers, and will play an important role insupporting their efforts to develop LNG export projects. Supporting propane exports from BC is alsoconsistent with the mandate of BC’s Ministry of Natural Gas Development as detailed in the 20132016 Revised Service Plan.Major developed economies in eastern Asia, Japan, South Korea and China lack the resources to beself-sufficient in energy, and rely on imports from other countries to meet their energy demands.Roughly 80% of current demand for propane in Japan, South Korea and China originates in theMiddle East. A burgeoning supply surplus in North America has increased the interest of Asianbuyers in sourcing propane from North America. Asian buyers are attracted to the lower prices ofNorth American propane as well as supply diversity and the lower political risk that accompaniesNorth American propane. Significantly reduced shipping times is an additional benefit of propanesupply from western Canada. The Project will provide significant economic benefits to Prince RupertPage 14January 20, 2016Ridley Island Project

Project Descriptionand the surrounding area by generating approximately 250 person years of construction activity, andapproximately 40 full-time positions once the facility is in operation. Local businesses will have theopportunity to provide services in a broad range of areas related to construction and operation of theProject. The large capital investment and annual operating expenses associated with the Project willdiversify economic activity at Ridley Island, and will help support the long term economic stability ofthe region for future generations.1.2Proponent InformationAltaGas is a publicly traded North American energy infrastructure company with a focus in Canadaand the United States. AltaGas owns and operates assets in natural gas, renewable energy andutilities and is listed on the Toronto Stock Exchange (ALA).AltaGas has significant experience developing and operating infrastructure assets in in North Americain the natural gas, natural gas liquids (propane and butane) and power sectors. Currently AltaGasowns or has interest in six large natural gas processing facilities in BC and Alberta that producepropane and butane. Two of these facilities have rail loading facilities.In British Columbia, AltaGas has over 1.6 billion in assets in the Province and recently constructedthree run-of-river hydroelectric facilities. All three run-of-river facilities started as greenfielddevelopment projects in northern BC. AltaGas was the originator of the hydroelectric development,moving the projects through initial development, permitting, construction, and commissioning.Additionally, AltaGas recently completed the development and permitting and has begun theconstruction on a new 200 MMSCFD natural gas processing facility (the Townsend Facility) innortheast BC. AltaGas also developed the Bear Mountain Wind Power Project in northeast BC.AltaGas has direct experience with handling, storing, and exporting propane and butane through itsresponsibility for operating of the Ferndale Propane Export Facility (owned by an AltaGas affiliate) inWashington State. The Ferndale facility has been operating safely for over 35 years without a majorincident. It has the capability to handle exports and imports of up to 3,226 tonnes a day and hasfacilities to handle and supply propane to the regional market for U.S. domestic consumption. Theterminal has rail, truck and pipeline capability and is connected to the two local oil refineries offeringgas balancing services. A photograph of the Ferndale facility is provided in Figure 5.With its track record and experience in project development, construction and operation in BC,AltaGas has a firm understanding of the regulatory regime and safety requirements under whichextraction and gas transportation facilities are developed and operated. This understanding isenhanced through AltaGas’ operating the Ferndale Facility.AltaGas will leverage the experience it has gained from developing, constructing and operatingprojects throughout BC, to execute the Project in a commercially viable and environmentally soundmanner, while considering the needs of PRPA, RTI, First Nations and stakeholders. AltaGas is aproven leader in developing working relationships with First Nations as evidenced by the positiveworking relationship created with the Tahltan Nation for the development and operation of theNorthwest Hydroelectric Facilities.Page 15January 20, 2016Ridley Island Project

Project DescriptionProponent Contact Information:AltaGas Inc.1700, 355 4th Avenue SWCalgary, AB T2P 0J1Telephone: 403-691-7575Facsimile: 403-269-5700Web: www.altagas.caProject Director:Dan WoznowVice President Energy ExportsEmail: [email protected]: 604-623-4770Figure 5 - Aerial view looking west of Ferndale Propane Export Facility, WashingtonPage 16January 20, 2016Ridley Island Project

Project Description2. Project Information2.1Proposed DevelopmentThe scope of the Project includes all physical works and activities associated with the construction,operation, and decommissioning of the Project. All project related physical works and activities arelocated on RTI lease lands or within the federal lands administered by PRPA.Propane supply for the Project will come from natural gas processing facilities in BC and Alberta.International buyers rely on well-defined product specifications to ensure that imported propane isconsistent and compatible with equipment they use to process or consume the product. AltaGas willbe relying on long-term contracts so that the operations team will be able to ensure a steady andreliable supply of propane to the Project that will meet customer specifications. The Project will bedesigned for propane only but will include the capability to handle butane in the future using the sameequipment.The facility is being designed to run at an annual average of 3,226 tonnes/day. To enhance reliability,the facility will add redundancy by incorporating two trains, each with a capacity to handle a maximum3,226 tonnes/day. The ability to occasionally process over the average 3,226 tonnes/day is beingdesigned in to the facility in order to accommodate situations where trains are backed up due tounpredictable events that could close the railway temporarily. The environmental assessment beingundertaken will adopt a conservative approach by considering the maximum potential throughput ofthe facility.Key Project Parameters are presented in Table 1 below:Table 1 - Key Project ParametersPage 17Inlet ProductHD 5- Propane ( 90% C3)Export ProductJ-Spec Propane ( 95% C3)Energy Storage Capacity2.66 PJExpected Average Daily Capacity3,226 tonnes/dayAnnual Capacity1,177,420 tonnes/yearRailcars per day 50-60 railcars/dayStorage Track Space for shunting200 railcarsUnloading Spots (two sides)Up to 20 unloading racks, with a capacity to unload up to 40 railcarsRefrigerated Storage Tank Capacity98,000 m3 (Fully contained, pre-stressed concrete type)Power SupplyApproximately 15 MW. The facility will use gas driven compressors to supply aportion of the process refrigeration load. The remainder of the facility will be run offpower from the BC Hydro grid. The facility will have sufficient on-site dieselemergency power generation for critical services.Utility Requirements1000 kg/hr or 522.3 USG/hr (estimate)Ship Handling Capabilities230 m (Overall Length), 38.4m (Beam), 64,220 DWT (Deadweight Tonnes), 13.6 m(Summer Draft)January 20, 2016Ridley Island Project

Project DescriptionShip turnaround time40 hoursNumber of carriers/yearApproximately 20-30 at full capacityOperations24/7/365 for rail handling, processing and ship loading2.2Project ContextThe Project is being built on a brownfield site, designated and used for port related activities withinRTI leased lands and PRPA jurisdiction. The Project fits within the objectives and land use plansdescribed in the PRPA 2020 Land Use Management Plan, which was reviewed by the public andFirst Nations in a consultation process. All new construction for the Project will take place onpreviously cleared sites and/or will build upon existing infrastructure. In addition, a great deal ofenvironmental information is publically available through the work done on recent environmentalassessment processes in the immediate area, PRPA sustainability planning and implementationefforts, and known and proven strategies for mitigation of any expected environmental effects in thevicinity of Prince Rupert and for propane export projects. Consequently, AltaGas believes thatenvironmental effects can be avoided or minimized through proven and effective mitigation measures.2.3Project Components and ActivitiesAll land and docking facilities required by the Project will be located on PRPA land or RTI lease land.AltaGas will design the unloading, refrigeration, storage, and associated facilities to fit within the areasubleased from RTI (see section 2.4 and Figure 2). Other facilities, several of which will have shareduse with RTI, are described in section 2.3.1.2.3.1Project ComponentsThe Project will include the following components (Figure 2):Project Facilities on PRPA Land Build out of track A6 (shared use with RTI). Construction of tracks A7 and A8 (shared use with RTI).Project Facilities on RTI Lease LandPage 18 Regraded existing rail sidings (shared use with RTI). Connection to RTI’s existing 69 kV substation connecting with the BC Hydro grid Connection to the existing natural gas line terminating on the RTI lease lands. New buildings, including: administration, central control room, lab, operations, washroomsand sanitary waste disposal and maintenance buildings (shared use with RTI).January 20, 2016Ridley Island Project

Project DescriptionProject Facilities on the AltaGas Sub-Lease Site Rail tank car unloading equipment. Propane storage bullets. Propane refrigeration equipment. Boil off gas recovery system. Gas driven compressors. Connection to the BC Hydro grid. De-ethanizer. Equipment cooling system (water or air). Refrigerated storage. Fire monitors. Deluge system (integrated infrastructure). Ground flare. Storm water settling pond (shared use with RTI). New vehicle access bridge (shared use with RTI). Vehicle parking. New access gate Upgrading of the existing stormwater outfall pipe (shared use with RTI).Project Facilities on the Existing RTI Jetty Pipe rack along the existing trestle to support the liquid loading and vapour return lines. Two liquid loading lines (size TBD) running the length of the trestle. Two vapour return line (size TBD) running the length of the trestle. Loading arms on the trestle to offload propane to the VLGCs.2.3.2Project ActivitiesThe Project includes the following activities:During construction:Page 19 Site preparation, including limited blasting and grading of the AltaGas sub-lease site. The site isalready cleared, so there will be little to no clearing, grubbing, or stripping of overburden. Removal of the existing sulphur storage facility. The facility was never commissioned so nohazardous substances are anticipated to be encountered.January 20, 2016Ridley Island Project

Project Description Relocation and reconstruction of the existing RTI settling ponds on the AltaGas sub-lease site. Installation of utilities, including electrical power, natural gas, water, sewers, fire protection,stormwater settling pond, and upgrading RTI’s existing stormwater outfall pipe on the RTI leaselands and the AltaGas sub-lease site. RTI will share the upgraded outfall pipe with AltaGas toavoid the addition of a second effluent point. Construction of tracks A7 and A8 and build out of track A6 on PRPA land. Re-grading of existing rail sidings on RTI lease land. Connection to the BC Hydro grid at the existing RTI tie-in on RTI lease land. Installation of piping and loading arms on the existing RTI jetty. Installation of the refrigerated propane storage tank on the AltaGas sub-lease site. Installation of the propane refrigeration equipment on the AltaGas sub-lease site. Installation of a new vehicle access bridge to the RTI coal stockyard area from the AltaGas sublease site, and removal of the existing bridge. A new at-grade turn-off to the bridge from the main road and access gate will be establishedapproximately 340m north of the existing turn-off. Approximately 250 person years of construction activity.During operations (see additional information in Section 2.4: Receiving, Storing andOffloading Propane): Continuous operation capabilities (24 hours, 365 days a year). Full-time employment for approximately 40 people. Receiving and unloading propane from CN trains accessing the site on existing rail tracks. Refrigerating propane. Storing propane. Loading propane carriers for export (see additional information in Section 2.5: Marine Jetty:design, operations, and safety systems).During decommissioning: Removal of land-based above-ground infrastructure on the AltaGas sub-lease site. Decommissioning of infrastructure on the jetty will be the responsibility of RTI.2.4Receiving, Storing and Offloading Propane2.4.1Transportation of Propane to Facility by RailThere are no pipelines in the Prince Rupert area that can be used to transport propane. As a result,all supply will be brought by rail to the RTI site from processing facilities further east in BC andPage 20January 20, 2016Ridley Island Project

Project DescriptionAlberta. Gas pr

Land to the north and east of Ridley Island is forested mountain of Kaien Island between the port and the city of Prince Rupert. Porpoise Harbour is connected to Chatham Sound between Ridley and Lelu Islands, and to Wainright and Morse Basins to the east. Ridley Island falls under the Port of Prince Rupert 2020 Land Use Management Plan (2010) that