Birchcliff and AltaGas enhance long-term partnership
Birchcliff and AltaGas enhance long-term partnership announced an expanded partnership focused on reducing long-term operating costs and connecting more liquified petroleum gas into premium global markets.
As part of the increased partnership, Birchcliff and AltaGas have entered into a long-term contract operating agreement (COA) whereby Birchcliff will take over operatorship of AltaGas' Gordondale deep-cut gas processing facility (the Gordondale Facility). This will allow Birchcliff to leverage cost optimization opportunities that exist between its 100% owned and operated gas plant at Pouce Coupe (the Pouce Coupe Gas Plant) and the Gordondale Facility, which are located approximately six miles apart and are pipeline connected. These optimization opportunities are expected to drive lower operating costs, reduce downtime, and optimize natural gas liquids recoveries for Birchcliff, with no net impact on AltaGas' profitability.
AltaGas will continue to own 100 percent of the Gordondale Facility with no plans to reduce its ownership. The Gordondale Facility will continue to operate under the existing long-term take-or-pay processing agreement between the parties (the "Processing Agreement"), with Birchcliff as operator for the remainder of the Processing Agreement's term, which will continue until at least December 31, 2032. Birchcliff has also entered into additional long-term tolling agreements with AltaGas whereby Birchcliff will market additional LPG volumes through AltaGas' global exports platform, which is aligned with AltaGas' strategy to grow tolling volumes and cash flow predictability, while providing Birchcliff with direct market access to premium LPG netbacks in Asia with Far East Index (FEI) pricing.
The uniqueness of these agreements is underpinned by Birchcliff representing 100 percent of throughput volumes at the Gordondale Facility, which creates opportunities for operational efficiencies and cost savings within Birchcliff's Gordondale and Pouce Coupe areas. The agreements highlight the benefits of infrastructure owners and producers partnering to drive solutions that deliver the best outcomes for all stakeholders.
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