AltaGas has signed a non-binding letter of intent (LOI) with a significant producer to construct multiple midstream assets in Montney, Canada.
The assets include a 120mmcf/d deep-cut natural gas processing facility, a natural gas liquids (NGL) separation train capable of processing up to 10,000bbls/d of NGL mix and a rail terminal.
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These facilities will be developed in another area of the Montney away from the company’s current operations in the city.
The new facilities are expected to have access to the CN rail network that will enable it to transport propane to the Ridley Island Propane Export Terminal.
AltaGas president and CEO David Harris said: “We look forward to working closely with a new customer and are excited to bring significant new development to yet another area of the Montney.
“This development broadens our customer base and drives continued growth for our midstream business, including our energy export strategy.”
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By GlobalDataAccording to the LOI, the deep-cut processing facility will be jointly owned, while AltaGas will have full ownership of the NGL separation train and rail terminal.
AltaGas estimates that the deep-cut processing facility will cost between $100m and $110m.
The NGL separation train and rail terminal are expected to cost approximately $60m to $70m.
Facility construction and completion is subject to further negotiation and execution of definitive agreement, which is expected to be signed in the first quarter of this year.
Subject to all customary conditions and regulatory approvals, the facilities will start operating from early 2019.
