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Birchcliff Energy and AltaGas Ltd. announce expanded partnership
By Plant Staff
Business Operations Industry Production Energy Resource Sector contracts manufacturing oil productionAs part of the increased partnership, Birchcliff and AltaGas have entered into a long-term contract operating agreement whereby Birchcliff will take over operatorship of AltaGas' Gordondale deep-cut gas processing facility.
CALGARY — Birchcliff Energy Ltd. and AltaGas Ltd. announce an expanded partnership focused on trying to reduce long-term operating costs and connect more liquified petroleum gas (LPG) into premium global markets.
As part of the increased partnership, Birchcliff and AltaGas have entered into a long-term contract operating agreement whereby Birchcliff will take over operatorship of AltaGas’ Gordondale deep-cut gas processing facility. This will allow Birchcliff to leverage cost optimization opportunities that exist between its 100 percent owned and operated gas plant at Pouce Coupe and the Gordondale Facility, which are located approximately six miles apart and are pipeline connected. These optimization opportunities are hoping 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, 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 pricing.
The uniqueness of these agreements is underpinned by Birchcliff representing 100 percent of throughput volumes at the Gordondale Facility, which creates reportedly opportunities for operational efficiencies and cost savings within Birchcliff’s Gordondale and Pouce Coupe areas.