AltaGas to Purchase a $650M Suite of Natural Gas Infrastructure

AltaGas has structured a purchase agreement with Tidewater Midstream and Infrastructure to acquire several of the Pipestone assets from the Pipestone Phase I and II projects. The purchase consists of the Pipestone Natural Gas processing plant for Phase I/II, the Dimsdale NG storage facility, the Pipestone condensate truck terminal, and the associated pipeline systems needed to execute each phase of the project. The acquisition was completed for a total of $650 million, accounting for synergies and the deployment capital for AltaGas’ completion of the Pipestone Phase II project.

Vern Yu, AltaGas’ President and CEO said: "The acquisition is consistent with AltaGas' long-term strategy and provides us the opportunity to support industry-leading producers' growth plans in one of Canada's most prolific resource plays. The assets will deliver highly contracted take-or-pay and fee-for-service revenue that will also bring meaningful long-term LPG supply for AltaGas' global exports platform. The acquisition should also deliver stable and growing earnings and cash flows, which will deliver strong long-term value creation for our stakeholders while reducing risk and providing long-term credit accretion.”

The companies have created the Pipestone Joint Venture to facilitate the final investment decision (FID), development, and construction of the project. Pipestone Phase II will feature a collaboration between AltaGas and Tidewater, regardless of the acquisition timeline or completion.

AltaGas will take ownership of the following Pipestone assets:

• Pipestone Phase I: Located in the Alberta Montney formation, this facility is a modern sour deep-cut NG plant with 110 MMcf/d of processing capacity and 20,000 Bbls/d of liquids handling capacity. The facility is also connected to 67 kms of NG gathering pipelines.
• Pipestone Condensate Terminal: Transport vehicles will truck-in and truck-out Pipestone liquids.
• Pipestone Phase II: The permitted expansion project will feature an additional 100 MMcf/d of sour deep-cut NG processing capacity and 20,000 Bbls/d of liquids handling capabilities. This phase is going to reduce operating costs and boost efficiency for the Pipestone complex as a whole.
• Dimsdale Gas Storage: An operational NG storage facility to the east of the Pipestone I and II facilities. It has a gas capacity of 15 Bcf that can be increased to 69 Bcf, and is connected to the pipeline systems of Alliance and NGTL.

"The Dimsdale Facility is a strategic natural gas storage asset that connects to the NGTL and Alliance pipeline systems and will provide Pipestone customers with egress certainty and the ability to manage pipeline maintenance and service disruptions in the years ahead,” Yu said. “The Dimsdale Facility will also be one of only three facilities that will be able to serve the balancing needs of the Montney and Canadian LNG demand pulls mid-decade and will be the only integrated processing and storage facility in the Montney. The facility has current working storage capacity of 15 Bcf with the ability to more than quadruple effective capacity to 69 Bcf on attractive incremental capital investments.”