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AltaGas gets approval to double capacity of British Columbia gas facility

The British Columbia Oil and Gas Commission granted approval to AltaGas Ltd.'s proposed expansion of the Townsend facility, which would double its capacity to 396 MMcf/d.

The initial expansion, called Townsend phase 2, would add a 100-MMcf/d shallow-cut natural gas processing facility, expected to cost C$85 million to C$95 million, according to a Dec. 22 news release. Incremental field compression equipment would also be provided to deliver raw gas production from the Blair Creek area to Townsend, which would cost C$35 million to C$45 million.

Townsend phase 2's full capacity would be committed to the driller Painted Pony Petroleum Ltd. through a 20-year take-or-pay agreement. Commercial operations are expected by October 2017.

The approval also includes a planned retrofit of the facility, which currently has 198 MMcf/d capacity, to a deep-cut facility in the future.

In addition, AltaGas started up its Pomona Battery Storage project, which has a 10-year Energy Storage Agreement with Southern California Edison Co. for 20 MW of resource adequacy capacity for a continuous four-hour period. Commercial operations under the terms of the agreement are scheduled to begin Dec. 31.

Capital program for 2017

AltaGas declared its 2017 capital program to be between C$500 million and C$550 million, 65% to 70% of which would go to its gas business. Most of the spending would be allotted for the Ridley Island propane export terminal, Townsend phase 2, the North Pine facility and pipelines, and other growth projects.

The utility business would receive about 20% to 25%, and the power business would get 5% to 10%. 2017 maintenance capital for gas and power is estimated at $15 million to $20 million.