Midstream oil and gas operator Keyera has sanctioned the first phase of its natural gas gathering and processing complex located in the Wapiti area south of Grand Prairie, Alberta, Canada.
A long-term gas handling agreement has been signed with the company’s primary customer to secure support for the sanctioned portion of the project, including an area dedication and take-or-pay commitments.
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The first phase is projected to cost $470m and comprises a sour gas processing plant with a 150 million cubic feet per day capacity and acid gas injection capabilities.
It also includes 25,000 barrels per day of condensate processing facilities, and a gathering pipeline system and field compressor stations.
Keyera gathering and processing senior vice-president Bradley Lock said: "Keyera is very pleased to have reached an agreement with its primary customer to begin constructing phase one of this project in the liquids-rich Montney.
"This project, along with our Wapiti pipeline and Simonette gas plant, increases our presence in one of the most exciting developments in the Western Canada Sedimentary Basin.”
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By GlobalDataPhase one includes the build-out of certain infrastructure sufficient to support both phases.
Following this decision, Keyera is planning to invest capital between $800m and $900m in this year.
Furthermore, the company is carrying out negotiations with other producers to nominate additional volumes and permit sanctioning of the second phase of the project.
The second phase, with an expenditure of $155m, is expected to provide an additional 150 million cubic feet per day of sour gas processing capacity and extend the gathering system.
The company will incur spending of about $625m over the two phases of the project.
Keyera noted that it may pursue additional gathering systems, based on requirements of third parties.
