AltaGas (TSE:ALA) reported record third-quarter results, supported by higher global liquefied petroleum gas exports, increased Montney throughput and strong margins in its midstream operations, while management said it expects to finish 2026 near the upper end of its recently raised guidance ranges.
Normalized EBITDA totaled C$389 million in the third quarter, up 45% from a year earlier, while normalized earnings per share rose to C$0.29 from C$0.04. President and Chief Executive Officer Vern Yu said the results were driven primarily by the midstream segment’s operating performance and favorable global LPG market conditions.
The company exported a record 147,000 barrels per day of LPGs to Asia from the West Coast during the quarter, loading 24 very large gas carriers. Midstream EBITDA rose 65% year over year to C$337 million, according to Executive Vice President and Chief Financial Officer Sean Brown.
Midstream volumes and export platform performance
AltaGas said export volumes increased 11% from the prior-year period. Its Ridley Island Propane Export Terminal, or RIPET, shipped an average of 89,000 barrels per day across 14 vessels, while its Ferndale terminal shipped 58,000 barrels per day across 10 vessels.
Total volumes across the company’s midstream system increased 12%, led by its Montney assets. Gathering and processing throughput rose 11% year over year, while extraction volumes increased 40%. At the Pipestone complex in Alberta, extraction volumes nearly tripled from a year earlier, largely due to the addition of Pipestone Two. The complex operated at 94% utilization during the quarter.
Management said it has hedged or tolled 91% of its remaining 2026 global export volumes. On non-tolled volumes, the average FEI-to-North America spread was approximately US$23 per barrel. AltaGas also said it had substantially hedged its 2026 Baltic freight exposure through time-charter vessels, financial instruments and tolling arrangements.
The company recently took delivery of its fourth VLGC time charter in Japan and has signed agreements for two additional vessels expected to arrive in 2027 and 2029. Management said the vessels are intended to reduce exposure to uncertainty in global shipping rates.
Trigon strike presents near-term uncertainty
AltaGas is managing a labor strike at Trigon Pacific Terminals, which provides rail logistics and berthing services for RIPET. The strike began Oct. 2 and had not materially affected operations initially, Brown said. However, the company said a recent Canada Industrial Relations Board ruling requires modifications to its mitigation actions and could affect throughput in the coming period.
Yu said AltaGas was disappointed by the ruling and expects it will slow vessel loading relative to planned rates. The company is pursuing legal options and is working with Trigon to limit the impact. Randy Toone, president of Midstream, said AltaGas is also evaluating the potential to redirect some rail volumes and LPG supplies to Ferndale, although that terminal cannot fully offset reduced RIPET capacity.
Brown said the company’s outlook incorporates what it views as a conservative assumption, reflecting the possibility of roughly two months of disruption, including reduced volumes in the following month. AltaGas nonetheless continues to expect results near the upper end of its 2026 guidance.
REEF project moves toward commissioning
In Prince Rupert, AltaGas said its REEF export project is 90% complete and has entered commissioning. The company expects the facility to enter service in the first quarter of 2027. The project will add 56,000 barrels per day of export capacity.
The highest-risk work at the site has been completed, Yu said, including installation of all piles and platforms, the main loading platform and loading arms. The remaining major work stream is installation of the VLGC mooring system, with suction-anchor installation planned for the fourth quarter and the rest of the system expected to be completed in early 2027.
AltaGas said REEF Optimization One remains on track for service in the second half of 2027. It expects to make a final investment decision on the 60,000-barrel-per-day REEF Optimization Two project before year-end, with an anticipated in-service window of late 2029 or early 2030 depending on supply growth.
The company also reported progress on its Dimsdale storage expansions in Alberta. Phase one is expected to enter service in the fourth quarter of 2026, while phase two is expected to be completed around the middle of 2027. The projects are designed to add 36 Bcf of natural-gas storage in the Alberta Montney.
Utilities regulatory outcomes and 2026 outlook
AltaGas’s utilities segment generated C$66 million in normalized EBITDA, roughly in line with the prior-year quarter. The company deployed approximately C$370 million in the segment, including modernization, new-growth and system-betterment spending.
The company received final rate-case orders in Virginia and Michigan. WGL in Virginia received approval for a US$74 million annual revenue increase, including US$39 million previously recovered through a rate rider, and an allowed return on equity midpoint of 9.8%. SEMCO in Michigan received approval for a US$33 million annual revenue increase and a 9.85% allowed return on equity.
Management said the outcomes will add US$68 million in revenue in 2027. AltaGas also announced an agreement to acquire 5,800 customers and about US$20 million of rate base in Michigan’s Upper Peninsula, with closing expected in the second half of 2027.
For 2026, AltaGas maintained guidance for normalized EBITDA of C$2 billion to C$2.1 billion and normalized EPS of C$2.35 to C$2.60, saying it expects to land toward the high end of both ranges. The company expects capital investment of approximately C$1.8 billion, with about 60% allocated to utilities. Its trailing 12-month adjusted net debt-to-normalized EBITDA ratio was 4.3 times at quarter-end, below its stated 4.5-to-5-times target range.
About AltaGas (TSE:ALA)
AltaGas is a leading North American infrastructure company that connects customers and markets to affordable and reliable sources of energy. The Company operates a diversified, lower-risk, high-growth Utilities and Midstream business that is focused on delivering resilient and durable value for its stakeholders.
