Tidewater Midstream and Infrastructure Ltd T.TWM

Alternate Symbol(s): TWMIF | T.TWM.DB.A

Energy Oil & Gas Midstream

Tidewater Midstream and Infrastructure Ltd. is a diversified midstream and infrastructure company with an integrated value chain across North American natural gas, natural gas liquids (NGLs), crude oil, refined product, and renewable energy markets. The Company's operations include downstream facilities, natural gas processing facilities, NGLs infrastructure, pipelines, storage, and various renewable initiatives. It also markets crude, refined products, natural gas, NGLs and renewable products and services to customers across North America. Its key midstream assets include the Brazeau River Complex and Fractionation Facility (BRC), a full-service natural gas and NGL processing facility with natural gas storage pools, and the Ram River Gas Plant, a sour natural gas processing facility with sulfur handling solutions and rail connections. Its key downstream asset is the Prince George Refinery (PGR), the sole light oil refinery within the interior British Columbia market.

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Tidewater Midstream and Infrastructure Ltd > RBC (LCFS)

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Post by retiredcfon Oct 17, 2022 8:57am

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Post# 35028529

RBC (LCFS)

October 17, 2022

Tidewater Renewables Ltd
Quick Take: New long-term RNG off-take agreement

TSX: LCFS | CAD 9.47 | Outperform | Speculative Risk | Price Target CAD 20.00

Sentiment: Positive

Our take

We positively view the long-term contract to sell renewable natural gas (RNG) to a high-quality regulated utility, which crystallizes the economics (i.e., roughly $10 million of run-rate EBITDA on a 100% basis) that Tidewater Renewables set out in April 2022 when it entered into the partnership for Rimrock Renewables. We note that the 20-year contract length is at the longer end of the range for potential off-take agreements that the company highlighted in April 2022.

Details

Long-term RNG off-take agreement with FortisBC. Rimrock Renewables, which is 51% owned by Tidewater Renewables, has entered into a 20-year agreement with FortisBC Energy to sell up to 525,000 gigajoules of RNG annually from a facility near High River, AB. The contract is subject to approval by the British Columbia Utilities Commission, FortisBC Energy's regulator, and Tidewater Renewables expects that decision to come in Q1/23.

Tidewater Renewables anticipates roughly $10 million in run-rate EBITDA from the facility. Underpinned by the long-term off- take agreement, the company noted that it expects the RNG facility to generate about $10 million in run-rate EBITDA (100% basis) once it is operational in H1/24. The EBITDA guidance is in line with the company's expectations that it set out in April 2022 when it entered into the partnership for Rimrock Renewables.