UPDATE 1-AltaGas signs natural gas deal with Nova Chemicals

* Says agreement for an initial term of 20 yrs

* Plans to process additional 250 mmcf/d at Harmattan Complex

July 6 (Reuters) - AltaGas Income Trust (ALA_u.TO) said it signed a deal with Nova Chemicals Corp (NCX.TO)(NCX.N) to process an additional 250 million cubic feet of natural gas a day at its Harmattan Complex in central Alberta, to extract ethane and natural gas liquids.

Under the deal, signed for an initial term of 20 years, AltaGas would deliver all liquids or co-stream gas products on a full cost-of-service basis to Nova Chemicals.

The trust, which has utility, gas-processing and generating arms, currently processes about 150 million cubic feet of gas a day at the Harmattan Complex.

"The Harmattan Co-Stream Project will expand the availability of valuable feedstock for Alberta's petrochemical industry, and retain extraction revenues and value in Alberta in a most economical manner," Chief Executive David Cornhill said in a statement.

Shares of the Calgary, Alberta-based AltaGas were down 32 Canadian cents at C$15.80 in midday trade Monday on the Toronto Stock Exchange. (Reporting by Koustav Samanta in Bangalore; Editing by Ratul Ray Chaudhuri)