AltaGas Ltd. says challenging marine conditions are slowing construction at its Ridley Island Energy Export Facility (REEF) on British Columbia’s north coast, although the propane and butane export terminal remains on schedule to begin operations before the end of March 2027.
The company announced during its second-quarter earnings report that the project is now 85% complete, with the most difficult phase of construction approaching its final stages.
AltaGas also revised the project’s capital cost estimate, increasing it by 12% to approximately $1.5 billion.
Chief Executive Vern Yu told analysts that while work on land has progressed ahead of schedule, offshore construction has been significantly affected by harsh maritime conditions.
“Since we started underwater construction in the fall of 2024, we have lost over 450 rig days due to severe weather, heavy ocean swells and interruptions from marine mammal activity,” Yu said. “These delays have gone beyond the project’s contingency planning and the gains made onshore have not been able to offset the increased costs of offshore construction.
But progress is being made, despite these setbacks. The facility’s jetty and loading platform are approximately 80% complete, with most of the remaining in-water construction expected to be finished within the next six weeks.
Yu said that, with the most technically challenging phase nearing completion, the company is confident it can deliver the project within its updated cost estimate and revised schedule.
AltaGas also reported strong financial results for the second quarter.
Net income attributable to common shareholders reached $288 million, up from $175 million during the same period last year. Diluted earnings increased to 92 cents per share, compared with 58 cents per share a year earlier.
The company posted revenue of $3.8 billion in the quarter, higher than analysts’ expectations of $2.84 billion.
AltaGas also increased its 2026 capital spending guidance to $1.8 billion from $1.7 billion in its previous guidance, reflecting ongoing investment in growth projects.
The company also increased its normalized earnings per share guidance to between $2.35 and $2.60, up about 6%.
