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Four Pipestone assets have been acquired by AltaGas to expand its portfolio of LPG production and supply.
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:
"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.”