AltaGas Ltd. (TSX:ALA) plans to spend $120 million to $140 million in 2017 to expand its Townsend natural gas processing plant in Northeastern B.C.
The Alberta company, which has invested heavily in recent years in B.C., plans to spend $500 million to $550 million in 2017, much of it in B.C.
Its capital spending for 2017 includes the expansion of the Townsend facility north of Fort. St. John, new pipelines to supply its North Pine natural gas liquids separation plant north of Fort St. John and a proposed new propane export terminal at Ridley Island in Prince Rupert.
AltaGas CEO David Harris said, “2017 will be a significant growth year for AltaGas as we continue to build out our northeast B.C. infrastructure and continue development of Canada's first ever west coast propane export terminal.”
Earlier this week, the BC Oil and Gas Commission approved AltaGas’ plans to expand the Townsend gas processing facility to double its processing capacity.
The expansion will cost $85 million to $95 million and will require an additional $35 million to $45 million in field compression equipment, the company estimates.
The expansion allows for further refinements later on to switch the plant from a shallow-cut to a deep-cut processing plant. Shallow-cut processing is for dry gas; deep-cut processing is for the “wet” gas – i.e. liquids like propane and condensate.
"The regulatory approvals for doubling the size of our Townsend facility and for potentially converting the existing facility to a deep-cut bode very well for continued and significant growth in northeast B.C.," Harris said.
As for the Ridley Island propane export terminal AltaGas wants to build, it is still moving through the regulatory process. AltaGas has not yet made a final investment decision on that project.
"Obtaining the final approval from regulators is key to making a final investment decision," Harris said.
If approved, AltaGas would spend between $450 million to $500 million to build a terminal that would export up to 1.2 million tonnes of propane annually to Asia.
AltaGas estimates that its own natural gas liquids production would cover about 40% of that total annual volume. The rest would come from other natural gas producers in B.C. and Alberta. The propane would be shipped to Prince Rupert by rail.
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