Enbridge Inc. and Encana Corp. have struck a midstream services deal to develop gas gathering and compression facilities in the Peace River Arch (PRA) region in northwestern Alberta.
Enbridge agreed to acquire from Encana gathering and compression facilities in the PRA region currently in service and under construction, with an expected closing date in December. Following the completion of construction of these facilities in 2013, Enbridge’s total investment in the PRA region is expected to be $264 million.
“The investment extends our footprint to the Peace River Arch region, which is expected to grow significantly in the years to come, under the same attractive commercial underpinning and return as our original Cabin investment,” said Enbridge’s Leon Zupan, president of the gas company’s pipeline business.
Terms of the midstream services agreement for the gathering and compression facilities in the PRA region will parallel terms between Enbridge and Encana reached in 2011, Enbridge said. Enbridge is also working with Encana on facility scoping for further development of additional major midstream facilities in the region, it said.
Separately, Enbridge said it has agreed with the other owners of the Cabin Gas Plant development to defer the commissioning of Cabin Phase 1 and construction of Cabin Phase 2. Starting in December, Enbridge will begin receiving fees for its investment made to date in the Cabin Gas Plant, including costs expended on Phase 2. Enbridge will retain the right to develop, own and operate all major midstream gas processing facilities required by Encana in the Cabin facility.
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