Abraxas completes gas-processing plant expansion in northwestern Alberta

By the OGJ Online Staff

HOUSTON, May 3 -- Abraxas Petroleum Corp., San Antonio, Tex., Thursday announced it successfully completed the expansion of its gas-processing facilities in the Pouce Coupe/Valhalla area in the Peace River Arch of northwestern Alberta.

A 10-mile sour gas pipeline connects the drilling area at Pouce Coupe to Abraxas' wholly owned gas-processing plant at Valhalla.

Abraxas owns 90% of the processing plant, and Grey Wolf Exploration Inc. owns 10%.

The pipeline, owned 100% by Abraxas, delivers 5 MMcfd at a savings of 42¢ (Can.)/Mcf compared with processing costs charged by the previous third-party processor.

Another 2.5 MMcfd will be connected to the pipeline once a determination of the remaining available sour gas processing capacity is completed. Meanwhile, engineering for additional future plant expansion is under way.

Abraxas anticipated the Valhalla plant will reach capacity and that drilling successes will demand additional gas processing capacity.

At a Canadidan lease sale Wednesday, Abraxas and Grey Wolf Exploration obtained 2,400 acres of new leases for $2 million (Can.), with Abraxas having 55% interest in the leases and Grey Wolf Exploration 45% interest.

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