CALGARY, A.B. — AltaGas announced in a release this morning that it has received approval from the B.C. Oil and Gas Commission to double the size of the Townsend Facility to 396 million cubic feet per day, and to retrofit the existing 198 MMcf/d shallow-cut Townsend Facility to a deep-cut facility at a future date.
The OGC approved AltaGas’ expansion application on December 19th. The initial expansion will be a 100 Mmcf/d shallow-cut natural gas processing facility at the existing site, adjacent to the Townsend Facility. The estimated cost of Townsend Phase 2 will be approximately $85 to $95 million. In addition, incremental field compression equipment, estimated to cost between $35 to $45 million, will be required to move raw gas production from the Blair Creek area to Townsend. Townsend Phase 2 is expected to begin commercial operations in October 2017. It is expected that Townsend Phase 2 will be fully contracted with Painted Pony Petroleum Ltd. under a 20-year take-or-pay agreement.
“The regulatory approvals for doubling the size of our Townsend Facility and for potentially converting the existing facility to a deep-cut, bode very well for continued and significant growth in northeast B.C.,” said David Harris, President and CEO of AltaGas. “The success of our northeast B.C. strategy comes from working closely and building strong relationships with the First Nations, who are instrumental in making this happen, and from the ability to offer producers a complete energy value chain including access to Asian markets. We continue to see strong opportunities to expand our operations even beyond the doubling of Townsend and we will continue to work very closely with the First Nations, with producers and with the B.C. Oil and Gas Commission to realize these opportunities.”
In today’s release, AltaGas also provided an update on its proposed North Pine Facility. In October, AltaGas made a final investment decision to build a natural gas liquids separation train capable of processing up to 10,000 Bbls/d of propane and natural gas liquids mix approximately 40 km northwest of Fort St. John, British Columbia. In conjunction with the North Pine Facility, AltaGas submitted an application to the BCOGC to build two eight inch NGL supply pipelines that will run from the existing Alaska Highway truck terminal to the North Pine Facility. On December 16, AltaGas received its permits for the construction of the North Pine Pipelines. Site preparation for the North Pine Facility and the North Pine Pipelines is expected to commence in the first quarter of 2017 with a target commercial on-stream date in the second quarter of 2018.
The North Pine Facility will be connected to existing AltaGas infrastructure in the region and will have access to the CN rail network, allowing for the transportation of propane from the North Pine Facility to the Ridley Island Propane Export Terminal. AltaGas expects to build a second 10,000 Bbls/d NGL separation train following completion of the first train.
The proposed Ridley Island Propane Export Terminal located near Prince Rupert, British Columbia is expected to be the first propane export facility off of the west coast of Canada and will serve the growing demand in Asia while offering a new market for Canadian producers. It will be designed to ship 1.2 million tonnes of propane per year and is estimated to cost approximately $450 – $500 million. It will be built on a brownfield site with a history of industrial development, connections to existing rail lines and an existing marine jetty with deep water access to the Pacific Ocean. Propane from B.C. and Alberta will be transported to the facility using the existing CN rail network.
All documentation required for the project’s environmental approval has been submitted and is still under review.
“Obtaining the final approval from regulators is key to making a final investment decision,” said Harris. “We continue to work closely with First Nations and regulators to get our Ridley Island Propane Export Terminal approved, and we expect a determination shortly.”