$PEAK - how kelt cuts a deal with altagas - $PEAK - InvestorVillage
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Msg  60488 of 60727  at  8/8/2019 12:40:59 PM  by


The following message was updated on 8/8/2019 12:43:45 PM.

how kelt cuts a deal with altagas

 Altagas pays them 
note that under the terms of PONY deal with Altagas Pony has ZERO ownership of the townsend facility after 20 years. Instead PONY entered into a 20 year take or pay agreement with Altagas.
Kelt has entered into an agreement with AltaGas Ltd. (“AltaGas”) whereby the Company will construct a 16-inch gas pipeline from its Inga 2-10 facility to the AltaGas Townsend Deep-Cut Gas Plant. The total cost to build the pipeline is estimated to be approximately $39.0 million and ownership of the pipeline will be two-thirds Kelt and one-third AltaGas. The pipeline will have a capacity to transport up to approximately 300 MMcf per day of natural gas. AltaGas will reimburse Kelt the full amount of $39.0 million ($13 million during construction and $26 million after construction) and in return Kelt has agreed to make annual payments over 10 years as repayment for its share of the cost of the pipeline (approximately $26.0 million). The annual payments to AltaGas over ten years are representative of payments that would have been required if Kelt did not take an ownership interest in the pipeline but instead entered into a take-or-pay arrangement to deliver gas through the pipeline as a third party. Under such an arrangement, Kelt would not have an ownership interest in the pipeline after 10 years and would have to re-negotiate transportation terms thereafter. Under the current agreement, Kelt retains its two-thirds ownership in the pipeline after the ten year term is complete, with no further financial obligation to AltaGas. 

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