​Horizon North gearing up for LNG Canada construction

Horizon North Logistics is ready for new opportunities on the way should the LNG Canada partners do what is expected and make a positive final investment decision this year.

The Calgary-based provider of modular construction and industrial services closed a $50 million equity financing last week. Approximately half of the financing will be used to pay down debt in order to “take advantage of opportunities associated with new LNG projects in Western Canada,” the company said.

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There is but one LNG project under development with near term prospect of execution, the $40 billion Shell-led LNG Canada facility slated for Kitimat, B.C.

“Horizon North currently owns 57 acres of land in Kitimat, which is zoned for camp, commercial and residential development,” Peters & Co. analyst Jeff Fetterly wrote in a research note on June 27.

“Site work for the camp and commercial developments is complete, and we estimate a lead-time of approximately three months for installation of initial beds. Upon a positive FID from LNG Canada, we expect Horizon North will operate a camp in Kitimat with up to 1,000 beds and complete the custom sale of up to two modular hotels (total of 150-200 beds).”

That’s not all — Peters & Co. believes that Horizon North is pursuing a broader scope of activities including the construction and custom sale for a portion of the LNG Canada main construction camp, catering and operations contracts for the main construction camp, the construction and custom sale of modular residential housing in Kitimat, and the redeployment of rental beds to support construction of LNG Canada’s Coastal GasLink Pipeline.

In aggregate, the analysts estimate the LNG project could generate $85 million to $125 million of incremental earnings for Horizon North by 2023. 

© Copyright 2018 Alaska Highway News

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