AltaGas has signed a deal with Kelt Exploration to support the expansion of one of its Montney gas plants as well as to feed the propane export terminal it is currently building near Prince Rupert.
In a project valued at $180 million, AltaGas will construct 198 mmcf/d of deep cut natural gas processing capacity at the Townsend Complex near Fort St. John. This will consist of 99 mmcf/d of new capacity and the conversion of an existing 99 mmcf/d of shallow cut capacity to enhanced natural gas liquids recovery.
Kelt’s 10-year take or pay agreement for 75 mmcf/d also includes capacity using the Ridley Island Export Terminal, by way of AltaGas’s North Pine Fractionator, which the company plans to expand.
Upstream volumes will come primarily from Kelt’s Inga acreage near Fort St. John.
During the first three years of the contract the company also has the option to commit to additional Townsend capacity up to a total of 198 mmcf/d.
Kelt produced 26,120 boe/d in the second quarter of 2018, including 90.7 mmcf/d of natural gas and 2,700 bbls/d of natural gas liquids. As of July, the company planned to exit this year between 28,500 to 29,500 boe/d, with up to 96 mmcf/d of natural gas and 3,600 bbls/d of natural gas liquids.