by RBC. GLTA

AltaGas (ALA) – $35.54 – New Partnerships with Idemitsu Kosan to Explore LPG and LNG Export Opportunities

Outperform, Average Risk, Price Target: $38.00 (prev: $36.00)

ALA and Idemitsu Kosan recently announced a 50/50 joint venture agreement to pursue opportunities to export liquefied petroleum gas ("LPG") and liquefied natural gas ("LNG") from Canada to Asia. Despite its preliminary nature, RBC CM views the development positively, as the partnership with Idemitsu affords market access to Asia, providing ALA with an opportunity to capitalize on the existing asset footprint of its PNG subsidiary. As part of the agreement, RBC CM does not expect ALA to alter its risk profile by taking on material commodity price exposure. That said, RBC CM’s new price target is not tied to the Idemitsu announcement, but rather to expected sector-wide valuation improvements