Additional Processing Fee Agreements at Pipestone Montney Sour Deep-Cut Processing Facility and Five Year 17 Bcf Commitment at Ram River Gas Plant
CALGARY, March 22, 2018 /CNW/ –
Definitive Agreement with TransAlta
Tidewater Midstream and Infrastructure Ltd. (“Tidewater” or the “Corporation”) (TSX:TWM) is pleased to announce that it has entered into a definitive agreement with TransAlta Corporation (“TransAlta”) for the procurement of long lead items such as the steel and associated valves to construct the 120 km natural gas pipeline from its Brazeau River Complex (“BRC”) to TransAlta’s generating units at Sundance and Keephills (the “Development Agreement”), as contemplated in the letter of intent previously announced on December 6, 2017. The Development Agreement pertains primarily to the early work and procurement necessary to construct the pipeline and also describes the key terms that will be contained in subsequent definitive agreements to see the project to completion, including provision for a fifteen year take-or-pay commitment by TransAlta and an option for TransAlta to invest up to 50% in the pipeline. Construction of the project remains subject to certain customary conditions and regulatory approvals. The parties agreed in the Development Agreement to negotiate in good faith and execute the remaining definitive agreements over the summer, 2018 timeframe. The project remains on schedule and on budget.
Additional Processing Agreements at Pipestone Montney Sour Deep-Cut Processing Facility
Tidewater is pleased to announce that it has entered into an agreement with Kelt Exploration Ltd. (“Kelt”) for a volume commitment at Tidewater’s proposed sour, deep-cut Montney gas plant in the Pipestone area near Grande Prairie (the “Pipestone Plant”). Kelt commits to 25.0 MMcf/d of firm raw gas processing under a five-year take-or-pay arrangement at the Pipestone Plant. Kelt has the option to convert a part of its take-or-pay arrangement into an ownership interest of up to 15% in the Pipestone Plant. The Pipestone Plant remains subject to regulatory approval.
Tidewater has signed an additional agreement with a new customer for a reserve dedication at the Pipestone Plant. Tidewater currently has committed the majority of the volumes out of a plant capacity of 100MMcf/d under take-or-arrangements or reserve dedication agreements. Tidewater continues to work with multiple producers to fully contract this facility. The Pipestone Plant remains on schedule and on budget.
Five Year 17 Bcf Commitment at Ram River Gas plant
Tidewater is pleased to announce that it has entered into a five-year, 17.2 net Bcf volume commitment with an investment grade counterparty to process incremental net raw gas volumes of approximately 15 MMcf/d which will decline over a five-year timeframe at the Ram River gas plant.
Tidewater reiterates guidance of current run rate annualized EBITDA of $80 million.
Tidewater expects to commence its planned maintenance and turnaround operations in April, 2018 at the Brazeau River Complex (the “BRC”) which is scheduled to occur every four years. As a result, throughput at the BRC will be reduced in the second quarter of 2018.
Tidewater is pleased with its successful expansion of gas storage operations at both Pipestone and the BRC where Tidewater is currently contracted with an investment grade counterparty and continues to see significant interest from other parties to contract gas storage from Tidewater.
Tidewater has seen significant demand for low cost power and is responding by contracting tolls for small scale industrial power supply related to computer processing, which will be generating approximately $1 million of annualized EBITDA in the next 30 days, for zero capital investment by Tidewater. Tidewater may, subject to significant future contingencies, grow this opportunity to $5–$10 million of annualized EBITDA over the next 12 to 18 months without investing capital, but will evaluate future equity ownership given significant upside potential.
Tidewater is pleased to announce that its Board has declared a dividend for the first quarter of 2018 of $0.01 per common share payable on or about April 30th to shareholders of record on March 29, 2018. The ex-dividend date is March 28th, 2018. This dividend is an eligible dividend for the purpose of the Income Tax Act (Canada).
Fourth Quarter, 2017 Earnings Call
Tidewater will release its fourth quarter and full year financial results for fiscal 2017 on Thursday, March 29th, before the market opens. In conjunction with the earnings release, investors will have the opportunity to listen to Tidewater senior management review its fourth quarter and full year results of fiscal 2017 via conference call on Thursday, March 29th at 11:00 am MDT.
To access the conference call by telephone, dial 647-427-7450 (local / international participant dial in) or 1-888-231-8191 (North American toll free participant dial in). A question and answer session for analysts will follow management’s presentation.
A live audio webcast of the conference call will be available by following this link: http://event.on24.com/wcc/r/1624042-1/F8D075910E8A202D9870DFA3C5810BBD and will also be archived there for 90 days.
For those accessing the call via Cision’s investor website, we suggest logging in at least 15 minutes prior to the start of the live event. For those dialing in, participants should ask to be joined into the Tidewater Midstream and Infrastructure Ltd. earnings call.
A digital rebroadcast will be available approximately two hours after the conclusion of the live event on March 29th until April 5, 2018. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter pass code 1689684 #.
The Corporation’s Business
Tidewater is traded on the TSX under the symbol “TWM”. Tidewater’s business objective is to build a diversified midstream and infrastructure company in the North American natural gas and natural gas liquids (“NGL”) space. Its strategy is to profitably grow and create shareholder value through the acquisition and development of oil and gas infrastructure. Tidewater plans to achieve its business objective by providing customers with a full service, vertically integrated value chain through the acquisition and development of oil and gas infrastructure including: gas plants, pipelines, railcars, trucks, export terminals and storage facilities.