Painted Pony, AltaGas shares climb on gas supply deal

Tue Aug 19, 2014 4:07pm EDT
 
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Aug 19 (Reuters) - Canada's AltaGas Ltd said on Tuesday that it has signed a long-term strategic deal with Painted Pony Petroleum Ltd, helping secure supply for its plans to export natural gas and natural gas liquids to international markets.

Shares of Painted Pony Petroleum rose 7.2 percent to C$13.40 on Tuesday on the Toronto Stock Exchange, while AltaGas shares climbed 2.1 percent to C$52.98.

The 15-year deal gives AltaGas, a midstream energy firm, the right to market gas from Painted Pony's holdings in the liquids-rich Montney shale formation in northeastern British Columbia.

The Calgary-based company will build and operate a 198 million cubic feet per day (mmcf/d) processing facility in the Montney region, expected to cost C$325 million ($296 million) to C$350 million, where Painted Pony will have first right to 150 mmcf/d capacity.

AltaGas will help Painted Pony fund development of its Montney holdings with a cash injection of C$50 million for some 4.2 million shares.

AltaGas is separately developing a liquefied natural gas (LNG) terminal on British Columbia's coast along with its Japanese partner Idemitsu Kosan. The Triton LNG project is permitted to export up to 2.3 million tonnes of LNG per year.

(Reporting by Julie Gordon; Editing by Cynthia Osterman)