CALGARY, A.B. – AltaGas Ltd. announced today that it has entered into definitive agreements with Kelt Exploration Ltd. to provide an energy infrastructure solution for the liquids-rich Inga Montney development located in northeast British Columbia.
Altagas says that the Commercial Arrangements underpin the expansion of its Townsend Complex, including the addition of a 198 million cubic feet per day of processing capacity at the Townsend Deep Cut Facility.
Kelt announced in early July that it had signed a letter of intent with Altagas to process 75 million cubic feet per day of raw gas under a 10-year arrangement at AltaGas’ proposed Townsend Deep Cut Gas Plant.
In a release, Altagas said that the additional natural gas liquids will increase utilization in AltaGas’ existing liquids pipelines, positioning the company for an expansion of the North Pine fractionator to 20,000 barrels per day – which already has regulatory approval, and to provide additional propane supply to the Ridley Island Propane Export Terminal.
The Commercial Arrangements provide Kelt with firm processing of 75 million cubic feet per day of raw gas under an initial 10-year take-or-pay arrangement and includes raw gas gathering, liquids handling, field fractionation and propane marketing arrangements including export through Ridley Island.
The expected commercial operations date of the Townsend Deep Cut Facility is expected in the fourth quarter of 2019. The infrastructure investment for expansion and increasing the capture area of the Townsend site is estimated to be $180 million.
“We have significant investment opportunities ahead of us, with Gas being the primary growth driver followed by U.S. Utilities over the next few years,” said David Cornhill, Chairman and Interim Co-Chief Executive Officer of AltaGas. “Our presence in the two most prolific gas plays; the Montney and Marcellus/Utica—positions us to participate in energy export projects on both coasts of North America. Additionally, the recent NEB approval of the TransCanada North Montney expansion will enable producers to move ahead with their growth plans. AltaGas with its strategic infrastructure in Northeast British Columbia is well positioned to be a part of that growth.”
Under the terms of the Commercial Arrangements, Altagas said Kelt has the option during the first three years of the initial take-or-pay term to commit to additional firm processing at Townsend Deep Cut, up to a total of 198 million cubic feet per day for a term of its choice, with an additional minimum take-or-pay commitment of ten years.
AltaGas will construct 198 million cubic feet per day of deep cut natural gas processing capacity at the Townsend Complex. This will consist of the proposed and permitted 99 million cubic feet per day of deep cut capacity and the proposed and permitted modification of an existing 99 million cubic feet per day shallow cut capacity to enhanced NGL recovery.