Enbridge to supply Encana's Peace River midstream services

Enbridge Inc. has entered a midstream services agreement with Encana Corp. to develop gas gathering and compression in the Peace River Arch (PRA) region of northwestern Alberta. The agreement includes Enbridge’s acquisition from Encana of certain gathering and compression facilities in the PRA region currently in service and under construction, with an expected closing date in December.

The financial terms of the gathering and compression midstream services agreement will parallel previously established terms between the two companies reached in 2011. Enbridge said it is also working exclusively with Encana on facility scoping for further development of major midstream facilities in this region.

Enbridge also 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. Enbridge will begin receiving fees in December for investments made to date in the Cabin Gas Plant, including costs expended on Phase 2 and will retain the right to develop, own and operate all major midstream natural gas processing facilities required by Encana in the Cabin plant. Enbridge acquired Encana’s interest in Cabin last year (OGJ Online, Oct. 7, 2011).

Completion of construction in 2013 will bring Enbridge's total investment in the PRA region to roughly $264 million. Enbridge expects its investment in the Cabin and PRA region will exceed the previous level of capital committed to Cabin Phases 1 and 2.

Contact Christopher E. Smith at chriss@ogjonline.com.

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