Reduction of 70 workers expected to save $7M a year for AltaGas Ltd.

CALGARY – Calgary-based power and natural gas supplier AltaGas Ltd. said Thursday it has reduced its workforce by about 70 workers.

It said the job cuts completed in June would result in a $7-million restructuring charge on its second-quarter earnings. The reduction of its non-utility workforce is expected to result in savings of about $7 million per year.

The company listed 1,753 employees at the end of 2015 in a regulatory filing, with 1,056 considered utility workers and 697 in gas, power and corporate roles.

Spokeswoman Sandra Semple said the restructuring was prompted in part by AltaGas (TSX:ALA) selling natural gas-gathering and -processing facilities to Tidewater Midstream and Infrastructure (TSX:TWM) in February, allowing it to focus on operating larger projects requiring fewer staff.

AltaGas and its joint venture partners have halted work on two proposed liquefied natural gas projects in northern British Columbia in the past year, citing poor global LNG markets. But Semple said almost all of the workers associated with those projects have been reassigned to help plan its proposed Ridley Island Propane Export Terminal on the West Coast.

The $400-million to $500-million project is undergoing a formal environmental review process. The company plans to reach a final investment decision this year and begin commercial operations in 2018, subject to approvals.

AltaGas reported that adjusted earnings in the three months ended June 30 rose 43 per cent to $153 million from the same quarter of 2015, mainly due to its purchase last November of three natural gas-fired power plants in northern California for US$642 million.