CALGARY - Pembina Pipeline Corp. (PPL.TO) has signed a non-binding letter of intent to develop a liquefied petroleum gas export terminal on Watson Island, south of Prince Rupert, B.C.

The Calgary-based pipeline operator signed the agreement with Prince Rupert Legacy Inc., a wholly owned subsidiary of the City of Prince Rupert.

The company said it has started a site assessment for the West Coast project and engagement with stakeholders including aboriginal communities.

Initial assessments indicate the development of an export terminal with a capacity of about 20,000 barrels per day of LPG at a capital cost ranging between $125 million and $175 million, Pembina said.

The company said it expects a project timeline of two years from a final investment decision.

The project is still subject to completion of design and engineering requirements, appropriate definitive agreements, environmental and regulatory permits and the approval of Pembina's board.

Correction: A previous version of this story misidentified the liquefied petroleum gas project. BNN regrets the error.