Keyera sanctions Wapiti natural gas gathering/processing complex

Calgary—Keyera Corp. has sanctioned the first phase of its natural gas gathering and processing complex in the Wapiti area south of Grand Prairie, Alberta.

The sanctioned portion of the project is supported by agreements with its primary customer that include an area dedication and take-or-pay commitments under a long-term gas handling agreement.

The first phase of the project includes a 150-MMcfd sour gas processing plant with acid gas injection capabilities, 25 Mbpd of condensate processing facilities, and a gathering pipeline system and field compressor stations. Based on the proposed construction schedule, operations are targeted to start up in mid-2019. Phase 1 is estimated at $470  MM, as it includes the build-out of certain infrastructure sufficient to support both phases.As a result of this decision, Keyera expects to invest growth capital of between $800 MM–$900 MM in 2017.   

Keyera is actively negotiating with several other producers in the area to nominate additional volumes and permit sanctioning of the second phase of the project. Phase 2 would add an additional 150 MMcfd of sour gas processing capacity and extend the gathering system at an incremental cost of approximately $155 MM. The total cost of the two-phased project is expected to be $625 MM. Additional third parties may require incremental gathering systems to be built.

"Keyera is very pleased to have reached an agreement with its primary customer to begin constructing Phase 1 of this project in the liquids-rich Montney," said Bradley Lock, Keyera's Senior Vice President of Gathering and Processing. "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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