AltaGas Sells Non-Core Assets

Calgary-based midstream company AltaGas said September 10 it has entered into definitive agreements for the sale of non-core midstream and power assets in Canada and the US, with proceeds of C$560mn (US$425mn) directed to repaying the bridge facility related to the acquisition earlier this year of WGL Holdings.

The latest agreement will bring total proceeds from non-core asset sales to C$1.5bn, well on the way to AltaGas’ target of $2bn by 4Q 2018.

“We expect to have further announcements in the near future on our asset monetisations, which will continue to reshape AltaGas to focus on gas and US utilities, while keeping a strong footing in the power market with a focus on capital light, innovative solutions,” interim co-CEO David Cornhill said.

Canadian assets covered by the latest agreement include selected non-core smaller scale natural gas midstream and power assets and the 43.7mn shares of Tidewater Midstream & Infrastructure currently held by AltaGas. The sale, to Birch Hill Equity Partners Management, carries an aggregate purchase price of C$165mn.

In the US, agreement has been reached with Middle River Power III, a subsidiary of Avenue Capital, for the US$300mn (C$400mn) sale of the Tracy, Hanford and Henrietta gas-fired power plants in California. The three plants have combined capacity of 523 MW.

The Canadian asset sale is expected to close by year-end, subject to customary closing conditions and approvals from the National Energy Board and other federal and provincial agencies and commissions. The US sale should close in 4Q 2018, again pending customary closing conditions and the approval of the US Federal Energy Regulatory Commission.