AltaGas sells non-core natural gas transportation and storage assets in the United States for $ 344 million


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CALGARY – The shares of AltaGas Ltd. are on the rise after announcing the sale of its transportation and storage operations in the United States for $ 344 million in order to better focus on its core energy infrastructure business and pay down debt.

AltaGas announced the agreement to sell the assets to an entity owned by Six One Commodities LLC and Vega Energy Partners, Ltd., after markets closed on Friday.

On Monday, its shares rose 3.3% or 71 cents to a new 52-week high of $ 22.28.

In a report, analyst Nate Heywood of ATB Capital Markets says the deal is positive because it allows AltaGas to reduce its leverage by exiting non-core assets.

The company says the sale includes a number of contracts to transport and store natural gas, including around 31 billion cubic feet of leased and managed storage capacity. It produced US $ 21.2 million in normalized adjusted profit in 2020 and posted a five-year annual average of US $ 16.2 million.

AltaGas says the deal does not include its 10% stake in the Mountain Valley pipeline in the eastern United States or its 5.1% stake in the expansion of Mountain Valley Pipeline Southgate.

“Continued debt reduction will remain a top priority as we continue to grow the business,” CEO Randy Crawford said in a press release.

“We are also fortunate to sell the transportation and storage activities in the United States after a strong financial contribution from the segment in the first quarter linked to the high volatility of natural gas prices due to weather conditions.

This report by The Canadian Press was first published on April 26, 2021.

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