​Here’s what’s new with AltaGas’ $650 million in major project development

AltaGas CEO David Harris. Image: Joey Podlubny/JWN

Riding on the wings of record profits in Q1 2017, midstreamer AltaGas announced that it plans to invest $650 million on the development and construction of nine major projects this year.

AltaGas' gas segment will account for approximately 65 to 75 per cent of total capital expenditures. The company’s utility segment will account for approximately 20 to 25 percent while its power segment will account for approximately five to 10 percent.

Here’s what’s happening:

Townsend Gas Processing Facility Expansion (Townsend Phase 2)

Granted a positive final investment decision (FID) in February 2017, construction has commenced on the first train of Townsend Phase 2, a 99 mmcf/d shallow-cut gas processing facility adjacent to the currently operating Townsend Facility in northeast British Columbia.

Estimated to cost $80 million, the addition of incremental field compression equipment to move raw gas production from the Blair Creek area to Townsend, would bump that to between $120 to $140 million.

Fabrication is underway on several components of the project, as well as on the incremental field compression equipment, AltaGas says.

Commercial operation for Townsend Phase 2 is expected to begin in October 2017.

AltaGas and Painted Pony Petroleum Ltd. have signed 20-year take-or-pay agreements for this facility and the incremental field compression equipment.

North Pine NGL Project

AltaGas says “significant progress” was made on the first train of the North Pine NGL project in the first quarter.

Greenlighted in October 2016, the North Pine facility, northwest of Fort St. John, B.C. is connected to existing AltaGas infrastructure in the region and the CN rail network, allowing for the transportation of propane to AltaGas’ proposed Ridley Island Propane Export Terminal.

Two NGL separation trains are planned for this site, each capable of processing up to 10,000 Bbls/d of propane plus NGL mix (C3+). The project also involves the construction of NGL supply pipelines of approximately 40 km each, with total capital cost of the first train estimated at $125 million to $135 million.

The targeted commercial on-stream date for the North Pine Facility and pipelines has been accelerated to the first quarter of 2018, up from the second quarter of 2018.

Ridley Island Propane Export Terminal

After receiving approvals from federal regulators followed by a positive FID in January 2017, AltaGas has executed long-term agreements securing land tenure along with rail and marine infrastructure for its Ridley Island Propane Export Terminal.

The 1.2 million tonnes of propane per annum terminal is expected to be the first propane export facility on the west coast of Canada. Located on a brownfield site near Prince Rupert, B.C., it is estimated to cost $450 to $500 million.

Site preparation and pre-construction activities are underway and construction is expected to begin in the second quarter of 2017, with an expected in service date of Q1 2019.

Montney facilities

In January 2017, AltaGas entered into a non-binding letter of intent with “a significant Montney producer” to construct a 120 Mmcf/d deep-cut natural gas processing facility and a NGL separation train (10,000 Bbls/d of NGL mix processing capacity), and a rail terminal.

Negotiation of definitive agreements is currently on hold while AltaGas continues to have discussions with other producers in the Montney.

Early stage Deep Basin NGL facility

AltaGas says it is in the early stages of development of Deep Basin NGL facilities worth between $30 and $80 million.

The NGL facilities will have access to existing rail and can be connected to the Ridley Island Propane Export Terminal.

Discussions with producers to contractually underpin the facility are continuing and engagement with First Nations and key stakeholders is underway.

Marquette Connector Pipeline

Regulatory applications for the proposed Marquette Connector Pipeline, connecting the Great Lakes Gas Transmission pipeline to the Northern Natural Gas pipeline in Marquette, Michigan, were filed December 2016.

The pipeline is estimated to cost between US$135 to $140 million with an anticipated in-service date in 2020.

Blythe Energy Center

The Blythe Centre, a 507 MW natural gas-fired combined cycle power plant located in Blythe, California, is currently under development.

AltaGas says it continues to add flexibility to the existing facility, with increased operating ranges, reduced minimum run and down times, and increased ramp rates while securing a second source of gas supply to increase market flexibility.

Pomona Facility

Following the 2016 commissioning of the Pomona Energy Storage Facility in Southern California, AltaGas received California Independent System Operator (CAISO) certification in January 2017 for participation in the ancillary services market.

AltaGas continues to evaluate the need for additional energy storage at the current site, it says.

Energy storage development

AltaGas says its success with the Pomona Energy Storage Facility has increased its focus on additional energy storage needs in southern California.

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