AltaGas enters agreement with Black Swan Energy for 50% interest acquisition in Aitken Creek Processing Facilities

AltaGas Ltd enters into a definitive agreement with the Black Swan Energy Ltd for the acquisition of 50% stakes in Swan Energy's interest in Aitken Creek Processing Facilities located in Canada's Montney region.

The term or commercial arrangements provides 50% ownership in the existing 110-MMcfd North Aitken Creek gas plant and in Black Swan’s 100-MMcfd Aitken Creek gas plant currently under construction.

Additionally, AltaGas will have the option to participate in two future plant phases, including the potential for enhanced liquids recoveries which could more than double the NGL output of the Aitken Creek processing operations.The investment in the Aitken Creek processing business includes $136 million in 2018 and an estimated $50 million in fourth-quarter 2019.The Aitken Creek processing installations will have an estimated 210 MMcfd (gross) operational capacity with the potential for future expansions to increase processing capacity up to 360 MMcfd (gross).

Upon the completion of the acquisition, AltaGas and Black Swan will enter into a long-term agreement for Black Swan’s use of the AltaGas processing capacity on a cost-of-service basis at the Aitken Creek processing installations, which will be underpinned by a reserve dedication and area of mutual interest encompassing 30% of the Black Swan Montney lands as well as a priority of fill arrangement for AltaGas capacity ownership in the Aitken Creek operations.

The two companies will also form an infrastructure JV incorporating AltaGas’ related infrastructure assets.