AltaGas closes $46 million Edmonton Ethane Extraction Plant acquisition and becomes operator
CALGARY--(CCNMatthews - Aug. 25) - AltaGas Income Trust (AltaGas or the
Trust) (TSX:ALA.UN) announced today that it has closed the acquisition of a
48 2/3 percent interest in the Edmonton Ethane Extraction Plant (EEEP) from
BP Canada Energy Resources Company ("BP"). The effective date of the
acquisition is January 1, 2004. After adjusting for the economic benefit from
the effective date to closing, the purchase price paid by AltaGas for the
facility was approximately $42.5 million. In connection with the acquisition
AltaGas has employed BP's employees at EEEP and will immediately assume
operatorship of the plant.
EEEP straddles the ATCO Gas and Pipelines Ltd. system which transports
natural gas into the City of Edmonton and the Ft. Saskatchewan area. A long
term gas supply contract provides a secure feedstock supply to EEEP. EEEP is
directly connected to the Alberta Ethane Gathering System, and to BP's Co-Ed
NGL pipeline, providing safe and reliable outlets for the plant's products.
The plant has a licensed gross inlet capacity of 390 Mmcf/d of natural gas
and gross natural gas liquids (NGLs) production of approximately 15,000
Bbls/d of specification ethane and 6,000 Bbls/d of propane-plus product.
AltaGas' share of the plant's products will be sold under long term
contracts. The addition of EEEP will increase AltaGas' total net inlet
extraction capacity to 539 Mmcf/d and total ethane and NGLs production to
approximately 19,500 Bbls/d.
David Cornhill, Chairman and Chief Executive Officer said, "We now have
ownership interests in four of the nine deep cut extraction plants in
Alberta. With the addition of EEEP, we expect our extraction business annual
operating margin will grow to be in the range of our natural gas distribution
and transmission businesses." Mr Cornhill added, "We are excited by the
opportunities presented as operator of the EEEP facility and by the addition
of the EEEP employees. The expertise of the EEEP employees combined with the
expertise of our existing 500 plus employees strengthens our position as a
full midstream service provider and better positions us to capture
AltaGas moves energy from its source to the end user, adding value through
the process. The Trust has consolidated assets totalling over $950 million
and a market capitalization of approximately $1 billion. Its steadily
expanding asset base today includes natural gas gathering and processing
facilities, interests in ethane and natural gas liquids extraction plants,
and transmission pipelines. AltaGas distributes natural gas to Alberta
customers through AltaGas Utilities Inc., to customers in the Northwest
Territories through the Ikhil Gas Project and distributes gas in Nova Scotia
through its interest in Heritage Gas Limited. The Trust provides energy
services to customers, including marketing of natural gas and natural gas
liquids and sale of power from its power purchase based arrangements.
AltaGas' Trust Units are listed on the Toronto Stock Exchange under the
symbol ALA.UN. The Trust is included in the S&P/TSX Capped Income Trust Index
and the S&P/TSX Capped Energy Trust Index.
When used in this press release, the words "anticipate," "estimate," and
similar expressions are intended to identify forward looking statements. Such
statements are subject to certain risks, uncertainties and assumptions that
could cause actual results to differ materially from those contemplated in
the forward looking statements. These risks and uncertainties include
operating performance, regulatory and environmental issues, weather and
economic conditions, competition and financing availability. For additional
information on these and other factors see the reports filed by AltaGas with
Canadian securities regulators. AltaGas disclaims any intention or obligation
to update or revise any forward looking information whether as a result of
new information or future event.