Canadian Manufacturing

AltaGas to build $325M gas processing facility in northeast B.C.

Processing facility part of 15-year strategic alliance formed between AltaGas, Painted Pony Petroleum



CALGARY—A pair of Calgary-based energy firms have formed an alliance to get natural gas and liquefied natural gas (LNG) from northeast British Columbia to market.

AltaGas Ltd. and Painted Pony Petroleum Ltd. announced the 15-year strategic alliance that will see AltaGas build and operate a shallow-cut gas processing facility in the Montney resource play in B.C. that will have a capacity of 198 million cubic feet per day.

Painted Pony will maintain the right to a minimum of 150 million cubic feet per day of capacity in the facility, according to AltaGas.

“We are pleased to announce a multi-faceted strategic alliance with Painted Pony to support the exciting growth in the Montney region,” AltaGas chair and chief executive David Cornhill said in a statement.

“We view this strategic alliance as both a testament to AltaGas’ strategic assets and capability, as well as Painted Pony’s confidence in our ability to connect producers to new markets, including Asia.”

In addition to the construction of the gas processing facility and related infrastructure, AltaGas will become the primary marketer for Painted Pony’s natural gas and natural gas liquids production from its northeast B.C.

“We have established a strong working relationship with (the AltaGas) team and our companies are fully aligned with respect to the potential for Montney gas development and the timing required for achieving our mutual goals,” Painted Pony president and CEO Patrick Ward said.

“The strategic alliance also brings viable solutions for providing long-term marketing optionality for Painted Pony’s rapidly growing natural gas and natural gas liquids production.”

AltaGas said “further opportunities” may come following the construction of the processing facility, including the build-out of additional processing infrastructure and a potential expansion of the facility that could see a deep-cut system for the enhanced recovery of additional LNG.

The facility will be built about 100 kilometres north of Fort St. John, B.C., and 20 kilometres southeast of AltaGas’ Blair Creek facility, through which Painted Pony has already been processing a significant portion of its Montney production.

The Townsend Facility is estimated to cost approximately $325- to $350 million, and is expected to be in service by the end of 2015.

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