Export | Capital Markets | Capital Expenditure

AltaGas Ltd. Investing $1 Billion in BC over Next Two Years

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AltaGas Ltd. has reported Q2 normalized EBITDA of $107 million, the same as in second quarter 2014.

Highlights

• $1 billion investment in energy infrastructure in British Columbia over the next two years;
• Began construction of $350 million Townsend gas facility;
• Exclusivity agreement for LPG export site in British Columbia;
• Development process underway for liquids hub in Fort St John;
• Better than expected results from Forrest Kerr and Volcano Creek;
• Regulatory approval of Main Replacement Program at SEMCO resulting in increased rate base growth; and
• $107 million in normalized EBITDA.

David Cornhill, Chairman and CEO of AltaGas said: "With a stronger second half to 2015 we expect to deliver 10 to 15 percent year-over-year EBITDA growth. We continue to drive near-term growth. We significantly ramped up LPG exports, Forrest Kerr and Volcano Creek are performing better than expected and McLymont will be in service shortly. We are now in the construction phase at Townsend and expect to have it in operation in mid-2016."

• AltaGas continues to develop new markets for natural gas liquids as it expands its LPG export capabilities. In addition to expanding LPG export capability at the Ferndale facility located in the State of Washington and owned by Petrogas, AltaGas has entered into an exclusivity agreement to develop an LPG export site in British Columbia. The initial phase of this export facility is expected to ship 25,000 Bbls/d, with significant expansion opportunities.
• strong>LPG supply for the proposed export facility in British Columbia is expected to be sourced from AltaGas' natural gas processing infrastructure, as well as through Petrogas' logistics network. AltaGas has begun development of a liquids separation and handling facility near Fort St. John which will serve producers in the Montney region. The site is well connected by rail to Canada's west coast and North American markets. A FEED study is in progress and is expected to be completed by the end of 2015. Consultations with key stakeholders are commencing and the regulatory permitting process will begin shortly. AltaGas expects to make a final investment decision in 2016.
• strong>AltaGas is already processing natural gas from the Montney region at its Younger, Blair Creek and Gordondale facilities which are operating at close to full capacity. Additional processing capacity will be added with its new 198Mmcf/d Townsend shallow-cut processing facility. AltaGas has started construction and approximately $100 million of equipment and services have been procured for the project-to-date. The facility is scheduled to be in service by mid-2016.
• strong>On the LNG export front, AltaGas along with the other members of the Douglas Channel LNG consortium continue to develop the 0.55 million tonnes per annum project at Kitimat. Producer discussions to supply the project, as well as technical and permitting work, are ongoing. A final investment decision is expected in fourth quarter 2015.
• During the quarter, SEMCO's Main Replacement Program application was approved by the Michigan Public Service Commission. The approval allows for the recovery of capital expenditures from 2016 to 2020. The new rates took effect immediately and are expected to result in approximately US$3 million of additional earnings on an annualized basis.
• In second quarter 2015, EBITDA was driven by the addition in late 2014 of the Forrest Kerr and Volcano Creek hydroelectric power generation facilities, new US gas-fired power assets acquired in first quarter 2015 and favourable foreign exchange rates. Overall, EBITDA held flat as EBITDA growth was offset by the impact of historically low commodity prices as well as the planned turnarounds at Younger and Harmattan.