Canadian midstreamer Keyera is to go ahead with the phase two construction of the Wapiti Gas Plant. The project will add 150 million cubic feet per day of sour gas processing capacity to the facility, which is currently under construction south of Grande Prairie, Alberta.
Based on current plans, construction of this second phase is expected to be completed in mid-2020 at an estimated cost of approximately $150m.
In connection with construction of the second phase, Keyera is also expanding the two gathering systems that will deliver volumes. Additional compression will be added to both the Wapiti gathering system and the North Wapiti Pipeline System in order to meet the volume commitments of the two primary customers utilising these systems.
The expansion of the Wapiti gathering system is supported by Paramount Resources Ltd’s initial volume commitment on phase one of the Wapiti Gas Plant, while the expansion on the North Wapiti Pipeline System is supported by incremental volume commitments from Pipestone Oil.
Based on current estimates, the additional compression on the Wapiti gathering system is expected to cost approximately $85m with a target completion date in mid-2020. Including this additional compression, the total cost of both phases of the Wapiti Gas Plant is now expected to be approximately $705m. The additional compression on the North Wapiti Pipeline System is estimated to add approximately $40m to the cost of that project, bringing the total to $160m. Assuming timely receipt of all regulatory approvals and permits, the North Wapiti Pipeline System is expected to be completed in the second half of 2019.
As the majority of the spending for these three projects is expected to occur in 2019 and 2020, Keyera continues to expect to invest between $1bn and $1.1bn in growth capital in 2018 and is well positioned to fund its capital program.
“We are very pleased to be proceeding with these projects that continue to build Keyera’s footprint in the liquids-rich Montney regions of northwestern Alberta,” said David Smith, Keyera’s President and Chief Executive Officer. “With the volume commitments we are seeing, it is evident that producers continue to have confidence in this region as one of the most economic developments in the Western Canada Sedimentary Basin.”
For more information, visit: www.keyera.com
4th June 2018