B.C.'s second-largest run-of-river project, the 195-megawatt Forrest Kerr power station, officially started selling electrons to BC Hydro last month.
And while the Alberta company that developed the project on the Iskut River continues to focus on renewable energy projects in B.C., it’s a suite of liquefied natural gas projects for both domestic and export markets that might hold the most promise for the up-and-coming energy company.
AltaGas Ltd. (TSX:ALA) made its first investment in B.C. in 2007 with the acquisition of the Younger gas plant in Taylor. It also acquired the Blair Creek gas plant northwest of Fort St. John.
Its next major investment was the 102-MW Bear Mountain wind park near Dawson Creek – the first large wind farm to be built in B.C. That was followed by the $725 million Forrest Kerr run-of-river (ROR) project, which began producing commercial power in October under a 60-year purchase agreement with BC Hydro. It is a key part of the $750 million Northwest Transmission Line, to which AltaGas is contributing $180 million.
AltaGas is also building two smaller ROR projects: 66-MW McLymont Creek (expected to be in operation in mid-2015) and 16-MW Volcano Creek, which is scheduled to be in operation by late 2014. Combined, the three ROR projects alone represent a $1 billion investment.
Roughly 15% of AltaGas’ workforce is now based in B.C., and two of its subsidiaries have offices in Vancouver: Pacific Northern Gas and AltaGas Renewables.
“From a project management perspective, Vancouver’s going to be a place that we do all of our project management for our West Coast development for LNG and [liquid petroleum gas] exports to Asia,” said AltaGas founder and CEO David Cornhill. “We think it’s a good place to invest. We think it’s aligned with our clean-energy focus. There’s great natural gas opportunities as well.”
In 2011, AltaGas acquired Pacific Northern Gas, which serves 40,000 residential, commercial and industrial customers in northern B.C. The acquisition gave the company key pipeline assets that could be used to feed two liquefied natural gas projects proposed for the West Coast.
AltaGas is now part of a consortium that hopes to salvage the financially troubled Douglas Channel LNG project in Kitimat. That project is still under creditor protection, and the company is undergoing a restructuring.
Despite the financial challenges Douglas Channel LNG has faced, it could have one advantage over some other B.C. LNG proposals because AltaGas owns the pipeline that could supply it with natural gas. AltaGas is also now partnered with Idemitsu Canada Corp., a subsidiary of Japan’s Idemitsu Kosan Co. Ltd., on the Triton LNG project.
Both the Douglas Channel and Triton projects would use floating LNG terminals, and AltaGas’ involvement with the Douglas Channel project could “unlock” some key partnerships that could also be useful in developing the Triton project, said David Noseworthy, an analyst with CIBC World Markets.
One of those partnerships is with Exmar NV – a Belgian company that specializes in floating LNG technology and one of the partners in the Douglas Channel LNG restructuring plan.
Should the Triton project proceed, it would require a $1.5 billion expansion to the pipeline network.•
