trending Market Intelligence /marketintelligence/en/news-insights/trending/K2Yb3SNL-TP5-qp9VB9K1w2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

In This List

AltaGas continues to shed assets to pay for WGL purchase

S&P podcast - Coronavirus pandemic, oil price crash shake up energy sector

Case Study: A Utility Company Efficiently Sharpens Its Focus on the Credit Risk of New Customers

Energy Evolution Podcast

Energy Evolution Why solar energy could get even cheaper

Energy Evolution Podcast

US energy officials push innovation to meet evolving energy needs


AltaGas continues to shed assets to pay for WGL purchase

AltaGas Ltd. has continued to shed assets as the Canadian utility and midstream operator reduces debt to help pay for the acquisition of WGL Holdings Inc.

The Calgary, Alberta-based company agreed to sell about C$1.3 billion in noncore businesses in the second quarter, leaving it "just shy" of its 2019 target of C$1.5 billion to C$2 billion in sales, CEO Randy Crawford said on an earnings conference call. The company expected to pare its net debt by approximately C$3 billion by the end of the year from its 2018 exit level of C$10.1 billion. AltaGas's remaining businesses are performing strongly and "more than compensating" for any profit lost due to the asset sales, he said.

"We have moved swiftly and decisively over the last several months to execute on our asset sales program to de-lever our balance sheet, fund our capital program and maintain our investment-grade [credit] rating," Crawford said on the Aug. 1 call. "We have a number of other sales processes underway and we continue to see strong and sustained interest from numerous high-quality counterparties."

Delays in closing the 2018 purchase of WGL, which owns utilities in the District of Columbia and nearby states, along with shifts in the value of the Canadian dollar against its U.S. counterpart, gave AltaGas a rough start on the approximately US$7 billion transaction after it closed.

The company had mostly been an operator of midstream systems, power generators and natural gas utilities prior to the WGL transaction. The asset disposals to date have "transformed AltaGas into a more-focused Canadian midstream and U.S. utilities company," Crawford said. AltaGas aims to cut its net debt to 5.5x EBITDA by the end of 2019, a level consistent with investment grade-rated utilities and midstream companies.

At Canadian operations, returns from exporting propane from a newly commissioned terminal in British Columbia added about C$13 billion to second-quarter EBITDA, the company said. The Ridley Island propane export terminal began shipping the NGL to Asia from the liquids-rich Montney and Duvernay shales that straddle British Columbia's border with Alberta. The shorter distance to Asian markets relative to U.S. exporters and growing demand have boosted returns on propane sales for both producers and AltaGas.

"Through June we sold 1.36 million barrels of [liquefied propane gas] from [Ridley Island propane export terminal] to Asia, generating approximately [C]$13 million in EBITDA, or [C]$9 per barrel," Crawford said. "Going forward, we expect to sell 1.2 million bbl/month, or 40,000 bbl/d, to Asia."

Separately on Aug. 1, AltaGas reported second-quarter 2019 normalized EBITDA of C$203 million, an increase from C$166 million in the comparable 2018 quarter. The S&P Global Market Intelligence consensus estimate for the quarter was C$200.8 million.