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AltaGas announces signing of Letter of Intent to build new Montney facilities

Photo supplied by AltaGas
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FORT ST. JOHN, B.C. – AltaGas Ltd. announced today that on January 20, the company signed a non-binding Letter of Intent with a significant Montney producer to build a 120 million cubic feet per day deep-cut natural gas processing facility, a natural gas liquids separation train, and rail terminal this year.

The facilities, which are to be separate from AltaGas’ current Montney operations, are expected to have access to the CN rail network, allowing for the transportation of propane to the Ridley Island Propane Export Terminal. AltaGas made a positive Final Investment Decision on the terminal earlier this year.

Under the terms of the letter, it is said that the processing facility will be jointly owned, while the liquids separation train and rail terminal will be fully owned by AltaGas. The deep-cut processing facility is expected to cost approximately $100 – $110 million while the separation train and rail terminal are expected to cost an additional $60 – $70 million.

It is expected that the facilities will be underpinned with long-term take-or-pay and dedication commercial agreements. Completion of the project is subject to, among other things, negotiation and execution of definitive agreements, which AltaGas targets to have signed within the first quarter of 2017. It adds that subject to regulatory approvals, they expect the facilities to be online in early 2019.

“We look forward to working closely with a new customer and are excited to bring significant new development to yet another area of the Montney,” said David Harris, President and CEO of AltaGas. “This development broadens our customer base and drives continued growth for our midstream business, including our energy export strategy.”

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