Canadian AltaGas' Planned Capex for 2017 Slightly Under 2016 Range

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Researched by Industrial Info Resources (Sugar Land, Texas)--Canada's AltaGas Limited (TSX:ALA) (Calgary, Alberta) says its capital program for 2017 is in the range of C$500 million (US$369 million) to C$550 million (US$406 million), with a focus on growth projects including its proposed Ridley Island Propane Export Terminal in British Columbia and others.

In comparison, AltaGas expects its capital expenditures for 2016 to be about C$550 million, which is within its guidance range of C$550 million to C$600 million (US$443 million).

Industrial Info is tracking 16 active AltaGas capital projects worth a combined US$1.95 billion. This includes the US$500 million Ridley Island export terminal, to be built at Prince Rupert, British Columbia. The project is under environmental review. Company Chief Executive Officer David Harris said in a press statement that final regulatory approval is "key to making a final investment decision."

The terminal would supply Asia markets. It would receive liquid propane from British Columbia and Alberta, with an estimated throughput capacity of 1.2 million tons per year. AltaGas announced in October it had received approval from Canada's National Energy Board (NEB) to export propane. For more information, see October 21, 2016, article - Canada's AltaGas Sets Aim for Propane Exports to Asia.

For 2017, AltaGas' gas business will account for about 65-70% of the capital expenditure, while AltaGas' utility business will account for approximately 20-25% and the power business will account for 5-10%.

Canada's AltaGas Limited has received regulatory approval to double the capacity of its Townsend natural gas processing plant in British Columbia to 396 million cubic feet per day (MMCF/d). The initial expansion will be a 100 MMCF/d shallow-cut natural gas processing facility to be built on the existing site, which is located 62 miles north of North Saint John, British Columbia. The company estimates the project cost to be C$85 million (US$63 million) to C$95 million (US$70 million).

Major equipment has been ordered, and the expansion is expected to begin commercial operations in late 2017. AltaGas says it expects the expansion will be fully contracted with Painted Pony Petroleum Limited under a 20-year take-or-pay agreement.

Also, AltaGas said it made a final investment decision in October to build, own and operate a natural gas liquids ("NGL") separation train capable of processing up to 10,000 barrels per day (BBL/d) propane plus NGL mix located 40 kilometers northwest of Fort St. John, British Columbia. Site preparation for the North Pine Facility and associated pipelines will start in the first quarter of 2017, according to the company, which plans to have the facility up and running commercially in second-quarter 2018. AltaGas expects to construct a second 10,000 BBL/d NGL separation train following completion of the first train. Propane from the facility would be transported to the Ridley Island export terminal. The North Pine Project has a total investment value of US$210 million.

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