AltaGas Ltd. posted normalized EBITDA of $1.17 billion (CAD 1.575) billion for the full year of 2023, which it said was in the upper half of its 2023 guidance range and “included strong performance across the Midstream platform and ongoing enterprise growth”.
The company’s normalized earnings per share (EPS) was $1.41 (CAD 1.90) for the full year of 2023, which was slightly below the midpoint of its EPS guidance range, “principally due to higher interest costs weighing on strong operating performance across the business”, Altagas said in its most earnings release.
Altagas’ Midstream segment reported normalized EBITDA of $134.88 million (CAD 182 million) in the fourth quarter of 2023 compared to $120.80 million (CAD 163 million) in the same period in 2022. The company said the largest drivers of the increase included strong performance from the global exports business, allowance for funds used during construction on the Mountain Valley Pipeline project (MVP), and the absence of inventory write downs.
AltaGas said it was “pleased” with the construction progress on MVP, with the pipeline being 99 percent complete and expected to be placed into service in the second quarter. AltaGas emphasized that it “does not consider its equity stake in MVP as core and will consider value-maximizing opportunities as part of its plan to reach its 4.5x net debt to normalized EBITDA target” once the pipeline is fully operational.
"We are pleased with the results delivered during 2023," Altagas President and CEO Vern Yu said. "The performance demonstrates the strength of our platform and the actions we have taken to drive long-term value”.
"Fourth quarter Midstream performance was strong with normalized EBITDA up 12 percent year-over-year, despite delays on two LPG export vessels that had loadings pushed into the first quarter of 2024”, Yu said. “Canadian upstream development remains strong as the industry prepares for improved egress and the arrival of LNG Canada. This was reflected in AltaGas realizing higher year-over-year throughput volumes across our gas processing, fractionation, and liquids handling businesses during the fourth quarter, as we fill latent capacity and prepare for potential brownfield expansions to support industry development”.
The company’s global exports business shipped 90,996 barrels per day (bpd) of liquified petroleum gases (LPGs) in the fourth quarter of 2023 and an average of 106,071 bpd in 2023 from the Ridley Island Propane Export Terminal and the Ferndale terminal.
"The recent issues in the Panama Canal reiterated the importance of connecting Canadian LPGs to key Asian downstream markets and the mutual benefits of a growing Canadian-Pacific energy partnership”, Yu continued. “We estimate that Canadian producers realized an approximate US$9.50 per barrel better propane netback through long-term tolling at RIPET during the fourth quarter compared to selling domestically in the U.S.”
"The past year was an active period for AltaGas, including the Pipestone Acquisition, solidifying our REEF joint-venture, closing the Alaskan Utilities sale, advancing key Midstream commercial de-risking initiatives, and continuing to steadily grow our Utilities. I am excited about the road ahead, continuing to leverage the strong long-term fundamentals for natural gas and natural gas liquids (NGLs), and building on the strong successes of 2023”, he concluded.
AltaGas in January closed the acquisition of several Pipestone natural gas assets in Montney from Tidewater Midstream and Infrastructure Ltd.
The acquired assets include the Pipestone Natural Gas Processing Plant Phase I and Phase II expansion project, the adjacent Dimsdale Natural Gas Storage Facility, the Pipestone condensate truck-in/truck-out terminal, and the associated gathering pipeline systems required to operate these assets.
Recently natural gas producer EQT Corp. agreed to buy Equitrans Midstream Corp., which owns the MVP venture, for around $5.5 billion in stock. The project aims to take gas from the Marcellus Shale basin in Appalachia to markets in the Southeast.
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