​Horizon North starts executing LNG Canada strategy

Image: Horizon North Logistics

Horizon North Logistics has started executing its west coast LNG strategy, following the recent sanction of the $40 billion LNG Canada project.

The company says it will install an initial 200 beds of a potential 1,000 bed open camp facility, and develop commercial and residential modular offerings on its land in Kitimat, British Columbia.

The Calgary-based provider of modular construction and industrial services closed a $50 million equity financing in summer 2018, half of which was earmarked to pay down debt in order to “take advantage of opportunities associated with new LNG projects in Western Canada,” the company said.

Analysts with Peters & Co. Limited believe that Horizon North is pursuing “a broader scope of opportunities” related to the project. This includes the custom sale of a part of the LNG Canada main construction camp; catering and operations contracts for the camp; the construction and custom sale of modular residential housing in Kitimat; and the redeployment of rental beds to support construction of the related Coastal GasLink Pipeline.

“In aggregate, we estimate the first phase of the LNG Canada project represents $80 million to $115 million of EBITDA opportunity for Horizon North through 2023,” Peters & Co. said in a note last week.

“With rental beds sourced from the company’s existing fleet and the majority of LNG related revenue requiring only modest capital spending, we expect returns will be attractive.”

Horizon North reported a net loss of $157,000 for the third quarter of 2018, down from a loss of $6.15 million the previous year.