AltaGas and Painted Pony Petroleum form alliance on natural gas and liquids

AltaGas and Painted Pony Petroleum have entered into a 15-year strategic alliance to connect north-eastern British Columbia (B.C.) natural gas and liquids infrastructure with export markets.

Under the agreement, AltaGas will build and operate a 198 million cubic feet per day shallow cut gas processing plant at Townsend, B.C.

Painted Pony will maintain the rights to a minimum 150 million cubic feet per day of firm capacity.

The Townsend plant, which forms part of the first phase of the alliance, will be located approximately 100km north of Fort St John and 20km south-east of AltaGas’ Blair Creek facility.

The plant, which is expected to cost between $325m and $350m, is planned to start operations by the end of 2015.

AltaGas chairman and CEO David Cornhill said: "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."

The alliance is expected to further expand AltaGas’ midstream business and offer the required gas processing infrastructure for Painted Pony’s Montney reserves and access to worldwide natural gas and liquids.

The alliance also includes potential for the phase two expansion of the Townsend facility, which may feature a deep-cut system for the enhanced recovery of further natural gas liquids and fractionation facilities.

Painted Pony president and CEO Patrick Ward said: "We are very pleased to enter into this strategic alliance with AltaGas.

"We have established a strong working relationship with their 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.

"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."