Altagas Posts Record Exports of LPGs to Asia

Altagas Ltd. said it had another “strong” quarter, reporting normalized EBITDA of CAD 294 million compared to CAD 252 million in the same period in 2023.

The 17 percent year-over-year growth in normalized EBITDA was “principally driven by strong Utilities performance,” Altagas said in its latest earnings release.

The company’s Utilities segment reported normalized EBITDA of CAD 117 million in the third quarter compared to CAD 71 million in the third quarter of 2023. Altagas said the year-over-year growth was “principally driven by the partial settlement of Washington Gas' post-retirement benefit pension plan, contributions from rate base and accelerated replacement programs (ARP) investment, and enhanced cost controls”.

Its Midstream segment reported normalized EBITDA of CAD 181 million in the third quarter of 2024 compared to CAD 185 million in the previous-year period. “Despite rail outages due to the Alberta wildfires and national rail strike that drove higher one-time operating costs,” AltaGas said it was able to “deliver strong financial performance due to operational execution”.

AltaGas also reported exporting a record of 128,272 barrels per day (bpd) of liquified petroleum gases (LPGs) to Asia in the quarter, a nine percent year-over-year increase. The exports included 11 Very Large Gas Carriers (VLGCs) at Ridley Island Propane Export Terminal (RIPET) in Prince Rupert, British Columbia, and 10 VLGCs at Ferndale. The increase was principally driven by Ferndale volumes increasing by 22 percent and offsetting the majority of rail interruptions which largely impacted RIPET. “This strong operating performance, despite these interruptions, reiterates the value of having multiple export terminals to overcome short-term impacts,” the company noted.

Altagas stated that “strong progress was made” on the Ridley Island Energy Export Facility (REEF), specifically for in-water piling work for the jetty and the site's overburden activities. Compression, refrigeration and vessel fabrication work is advancing in controlled operating environments at offsite manufacturing facilities.

At Pipestone II, the company said that construction is progressing as planned, including completion of the two acid gas injection wells and the majority of the gas gathering system, while compression, processing and fabrication work is advancing at offsite manufacturing facilities.

Both midstream growth projects remain on schedule and on budget with 50 percent of REEF and 92 percent of Pipestone II project costs either incurred or under fixed price contracts, according to the release.

In May, AltaGas and Royal Vopak made a positive final investment decision (FID) on the Ridley Island Energy Export Facility (REEF), a large-scale LPG and bulk liquids terminal with rail, logistics and marine infrastructure on Ridley Island, British Columbia.

REEF will be developed on a 190-acre (77-hectare) site adjacent to AltaGas’ and Vopak’s existing RIPET, on lands administered by the Port of Prince Rupert (PRPA).

In January, AltaGas made a final investment decision on the Pipestone Phase II expansion project in the Montney Formation of Alberta.

Pipestone Phase II is a fully permitted, shovel-ready expansion project that will provide an additional 100 million cubic feet per day (MMcfpd) of sour deep-cut natural gas processing capacity and an additional 20,000 bpd of liquids handling capacity. The project is expected to be fully committed under firm take-or-pay and fee-for-service service agreements.

The project will deliver critical gas processing and liquids handling capacity in the Pipestone region, which is one of the fastest growing liquids-rich natural gas developments in Canada, the company said in an earlier statement.

Altagas President and CEO Vern Yu said that the outlook for the company’s midstream business was strong. “Canadian natural gas supply will increase significantly through 2030 due to Canadian LNG [liquefied natural gas] exports and rising local demand. This will deliver strong associated natural gas liquids (NGLs) supply that will need to be exported to global markets. Asia will continue to be the best market for Canadian LPGs where demand is expected to grow 45 percent through 2040”.

"As we look ahead, we continue to expect the strategic importance of our assets to grow as they serve to link increasing energy supply to high demand centers, enabling AltaGas to deliver continued value for our customers,” Yu added.

To contact the author, email rocky.teodoro@rigzone.com