AltaGas reports strong performance at Ridley Island

AltaGas Ltd. managed to do something in its second quarter that is somewhat unique these days in the Canadian oil and gas sector — produce a solid profit and even provide an optimistic outlook despite the headwinds created by the COVID-19 pandemic.

The Ridley Island Propane Export Terminal contributed $30 million of normalized EBITDA in the second quarter on exports of 41,460 bbls/d delivered to Asian markets at an EBITDA contribution of approximately $8/bbl, the company said.

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AltaGas remains on track to hit its 50,000 bbls/d export target through Ridley Island by year-end. The company has secured 50,000 bbls/d of supply at April 1, 2020, with 33% under long-term tolling agreement.

“Performance at RIPET remains strong,” CEO and president Randy Crawford said. “We continue to deliver on our goals, setting a record in the second quarter with 41,460 bbls/d of Canadian propane exported to Asia on seven ships. We are pleased with the progress we continue to make at RIPET and we remain on track to hit 50,000 bbls/d before year-end.”

The company reported normalized net income in the quarter of $17 million compared to $1 million last year in the same quarter. It said net income applicable to common shares dipped somewhat to $21 million compared to $41 million in the second quarter of 2019.

AltaGas was able to pay down debt, reducing it to $6.8 billion as of June 30, compared to $7.2 billion at the end of 2019.

The company reported quarterly revenue of $1.06 billion, down slightly from the $1.17 billion recorded in the same quarter of 2019. For the first six months of this year it generated revenue of $2.93 billion, down slightly from the $3.07 billion in the same period last year.

The company’s gas processing facilities also contributed to the good results, with its North Pine expansion adding to its overall gas processing revenue.

Its gas processing facilities, including North Pine, Townsend and Aitken Creek, are focused on the Montney, where gas production has grown steadily. However, it said “upstream spending headwinds” are likely to lead to lower overall gas production.

It said it expects Ridley Island to continue contributing to its results, especially given that about 87% of its propane export volumes are hedged in some form for 2020.

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