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Wapiti Gas Plant to Serve Montney Producers Starts Up Ahead of Schedule

On the heels of a friendly C$600 million ($449 million) natural gas processing takeover in Alberta, Oklahoma-based SemGroup Corp. highlighted a growth plan that drove the deal by starting up an operation in the Canadian province early.

The Tulsa firm’s Calgary subsidiary, SemCAMS, said Tuesday production began flowing to market two months ahead of schedule in late January from its freshly completed Wapiti Gas Plant near Grande Prairie in northwestern Alberta.

SemCAMS reported the new plant has contracted 95% of its capacity for 200 MMcf/d of natural gas, up to 20,000 b/d of condensate and 350 tons/day of sulphur. Built on its C$350 million ($262 million) budget, Wapiti processes gas laced with hydrogen-sulfide and liquids from the Montney Formation, which straddles northern Alberta and British Columbia (BC).

The anchor gas-producer customer, Calgary-based NuVista Energy Ltd., is considered a pure-play Montney company. SemGroup two years ago inked the deal with NuVista to build the plant and provide processing over 15 years.

The Wapiti plant opened two weeks after SemGroup and KKR & Co. announced a takeover of Calgary-based processor Meritage Midstream, describing the deal as expansion in “a growing, low-cost natural gas play.” Meritage is to be combined with SemGroup’s current Canadian assets to form SemCAMS Midstream ULC.

The growth strategy focuses on completing facilities currently under construction and developing additional expansion opportunities in the Montney and Duvernay production regions of northeastern BC and western Alberta.

SemGroup in 2017 also launched construction of the Pipestone Central Facility, a 280 MMcf/d sour gas plant designed to serve Montney producers working in the Pipestone region. The facility was designed to process raw sour gas with up to 10% hydrogen sulfide and 16,000 b/d of condensate.

SemGroup also has other sour gas facilities in Alberta near Whitecourt and Fox Creek, and it operates two sweet gas processing facilities in the region. Once Pipestone is completed, SemGroup has estimated that its licensed sour gas processing capacity would be more than 1.9 Bcf/d in Canada.

 

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