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Natural gas processing facility commences operation

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Hydrocarbon Engineering,

AltaGas Ltd has announced the start of commercial operations at its shallow-cut natural gas processing facility (Townsend 2A), located on the existing Townsend site, adjacent to the currently operating Townsend facility.

Commissioning of Townsend 2A was completed on 1 October 2017. Volumes are expected to progressively ramp up between 4Q17 – 1Q18. The CAN$125 million project was completed slightly ahead of schedule and approximately CAN$5 million under budget. AltaGas and Painted Pony Energy Ltd have entered into 20-year take-or-pay agreements in respect of Townsend 2A and the incremental field compression equipment, subject to the satisfaction of certain conditions contained in those agreements.

"By linking significant midstream projects together, Townsend, North Pine and the Ridley Island Propane Export Terminal (RIPET), we are executing on a vision of offering Canadian producers a complete energy value chain. The Townsend Gas Processing Complex is at the heart of our northeast British Columbia (BC) strategy and the safe commissioning of Townsend 2A marks the second stage of development at the complex," said David Harris, President and CEO of AltaGas. "The on-time and under budget commissioning of Townsend 2A was made possible through the success of AltaGas' self-perform model and by the outstanding contributions of local First Nations, including Halfway River First Nation and Blueberry River First Nation."

AltaGas has also significantly advanced its other major construction projects for its northeast BC and energy export strategies. The 10 000 bpd North Pine NGL separation facility is tracking under budget and ahead of its previous schedule of the first quarter of 2018, with an online date now expected in early December 2017. This investment will be backstopped by long-term supply agreements with Painted Pony for a portion of the total capacity, and will include dedication of all of Painted Pony's NGL produced at the Townsend and Blair Creek facilities. The remaining capacity is expected to be filled with NGL produced in the area.

Construction continues to progress at RIPET, with the third of eight concrete pours underway and the final pour scheduled near the end of 2017. As construction progresses, AltaGas is seeing increased interest from western Canadian producers and aggregators looking for new access to premium Asian markets for their propane. Construction is tracking on budget and RIPET is expected to be in service by 1Q19.

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