SemCAMs and NuVista Energy have reached a deal to build a new sour gas processing plant near Grande Prairie.
The Wapiti Gas Plant will cost between $300 million to $350 million and will have the capacity to process up to 200 million cubic feet per day of raw sour gas and another 20,000 barrels per day of condensate, SemCAMs said in an Oct. 11 announcement.
A 15-year agreement with NuVista “provides for take-or-pay obligations creating a significant backstop for the investment to be made,” according to the company.
“We are pleased to announce our plans to build the new Wapiti Gas Plant, and the significant expansion of our commitments for a true win-win with our growth oriented customer, NuVista Energy,” SemCAMS Vice-President and General Manager David Gosse said.
“Our safe and reliable history of operating sour gas plants and our existing infrastructure gives our customers a substantial advantage. This is an exciting project for SemCAMS, and another significant milestone in our strategic growth plans to meet the midstream needs of producers in the world class Montney and Duvernay plays.”
The Alberta Energy Regulator licensed the plant in August, and construction is expected to begin in the second quarter of 2017. The plant is slated to come online in 2019.
Negotiations are underway with other area producers to fully subscribe the remaining plant capacity, the company said.