CALGARY, AB, Dec. 23, 2024 /CNW/ – AltaGas Ltd. (“AltaGas” or the “Company”) (TSX:ALA) is pleased to provide a year-end update on global exports tolling and commercial contracting activities. One of the Company’s strategic priorities is to advance commercial de-risking of our Midstream business with increased global exports tolling and additional long-term commercial contracting across the value chain. AltaGas has made significant progress on this strategic priority in 2024 and exits the year on a very strong footing.
In December, the Company executed several commercial contracts that will provide long-term liquified petroleum gas (“LPG”) supply and tolling contracts for its global exports’ platform. This includes contracts with existing customers and the addition of new customers. Some of these contracts will take effect in 2027 with LPG volumes that will be added to Canadian supply while others will take near-term effect with export volumes initially flowing through the Ridely Island Propane Export Terminal (“RIPET”) and moving to the Ridely Island Energy Export Facility (“REEF”) once the facility comes online.
AltaGas continues to advance additional long-term tolling arrangements and believes it will be positioned achieve its long-term REEF contracting targets in early 2025. As previously disclosed, AltaGas is in commercial discussions for the more than 100 percent of REEF phase I capacity. Once AltaGas has achieved its long-term tolling target, the Company will strategically evaluate adding additional tolling contracts while maintaining reserve capacity to deliver on shorter-term contracting opportunities that provide open market access for our diverse customer base and deliver on AltaGas’ merchant export operations.
AltaGas’ West Coast Export Advantage is Robust
The long-term advantage of AltaGas’ west coast export capabilities remains robust. The current RIPET advantage for Canadian producers to export to Asia is approximately US$8/Bbl higher than selling domestically or to major U.S. LPG markets. The importance of the Canadian energy industry to diversify end market exposure for LPGs continues to grow as the U.S. oversupply compounds and reaffirms the benefit of its customers linking more Canadian barrels to premium Asian demand markets.
Construction activity at REEF continues to progress. Piling activities continued through December with temporary and permanent piles being added while uplands work is advancing as per schedule. Storage tank fabrication is progressing offshore with steel cutting more than 75 percent complete while rail construction is ongoing, and REEF will provide AltaGas and its customers material long-term logistical advantages.
Global Exports Contracts Build on Recent Contracts Across Midstream Value Chain
Recent global exports contracting awards build on the strong commercial success that AltaGas has delivered across other parts of the Midstream value chain in 2024. This includes two long-term agreements with a large investment grade international energy company in Northeastern B.C. for 100 Mmcf/d of gas processing capacity at the Townsend facility, along with associated liquids handling and fractionation services, and the extension of contract term with a large Canadian investment grade producer at the Pipestone I gas processing facility in the …