AltaGas Faces Construction Delays at Ridley Island Export Facility Due to Rough Seas

📅 2 weeks ago

AltaGas Ltd. reports challenges in the construction of its Ridley Island Energy Export Facility due to adverse maritime conditions, impacting timelines and costs.

CALGARY, ALTA. — AltaGas Ltd. is encountering significant challenges as it approaches the completion of its propane and butane export terminal located on the north coast of British Columbia. The Ridley Island Energy Export Facility, commonly referred to as REEF, is currently 85 per cent finished and is expected to commence operations by the end of March 2027, according to the company's recent second-quarter report. The estimated capital costs for REEF have surged by 12 per cent to approximately $1.5 billion.
Vern Yu, the chief executive officer, discussed the project's status during a conference call with analysts, stating that while onshore construction has progressed ahead of schedule, the in-water construction phase has faced significant obstacles due to adverse maritime conditions and weather-related delays. Since the initiation of in-water construction in the fall of 2024, the project has experienced the loss of over 450 rig days, primarily attributed to extreme weather conditions, high ocean swells, and the presence of marine mammals. These interruptions have surpassed the anticipated contingencies, leading to expectations that onshore efficiencies will not mitigate the increased costs associated with the in-water construction.
At the site in Prince Rupert, B.C., the jetty and loading platform are approximately 80 per cent complete, with most of the remaining in-water construction work expected to conclude within the next six weeks. "With the in-water phase of construction, the most complex and challenging part of REEF, nearing completion, we are highly confident in our ability to adhere to the revised cost estimates and schedule," Yu remarked.
In its financial results released on Thursday, AltaGas reported a net income of $288 million applicable to common shares, a notable increase from $175 million in the same quarter of the previous year. The earnings translated to 92 cents per diluted share for the quarter ending June 30, compared to 58 cents per diluted share during the same period last year. Revenue for the quarter soared to $3.8 billion, up from $2.84 billion recorded in the second quarter of 2025.
Moreover, AltaGas has adjusted its capital spending guidance for 2026, raising it from $1.7 billion to $1.8 billion. The company has also revised its expectations for normalized earnings per share to a range of $2.35 to $2.60, reflecting a six per cent increase from prior estimates.

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