NorthAmOil: AltaGas to buy Alberta Montney midstream assets for $481mn

Canada’s AltaGas announced this week that it had agreed to buy various natural gas midstream assets in the Alberta Montney play from Tidewater Midstream and Infrastructure for CAD650mn ($481mn). The acquisition includes the Pipestone gas-processing plant, the adjacent Dimsdale gas storage facility, the Pipestone condensate truck-in/truck-out terminal and the associated gathering pipeline systems required to operate these assets.

AltaGas said the transaction would strengthen its midstream value chain by expanding its footprint in the Alberta Montney as well as providing “meaningful” long-term liquefied petroleum gas (LPG) supply for the company’s export platform. This comes as AltaGas is working with Royal Vopak to develop an LPG and bulk liquids export terminal in British Columbia.

"The acquisition is consistent with AltaGas' long-term strategy and provides us the opportunity to support industry-leading producers' growth plans in one of Canada's most prolific resource plays,” stated AltaGas’ president and CEO, Vern Yu, who took over as the head of the company in July.

The total consideration for the assets will be comprised of CAD325mn ($241mn) in cash and the issuance of around 12.5mn AltaGas common shares to Tidewater. These will be priced at CAD26.07 ($19.31), based on AltaGas' 10-day volume weighted average price as of August 30.

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