Veresen Midstream LP, a 50-50 venture of Veresen Inc., Calgary, and Kohlberg Kravis Roberts & Co. LP, New York, has started up the first of three natural gas processing plants that will support the Encana Corp.-Mitsubishi Corp. jointly owned Cutbank Ridge Partnership’s (CRP) condensate-focused growth plan in the Montney area of northeastern British Columbia’s Dawson region (OGJ Online, Apr. 1, 2015).
The 200-MMcfd Tower rich-gas processing plant began operating on Sept. 20, ahead of schedule and under budget, Veresen said.
The two remaining plants now under construction also are ahead of schedule and under budget, the company said.
Alongside the 400-MMcfd Sunrise processing plant—which is scheduled for startup by mid-October for ramp up to full rates throughout 2018—Veresen said it expects the first of two 200-MMcfd trains at the Saturn processing plant to be in-service by yearend, followed by the second train during first-half 2018.
Once all three plants are operating, Veresen Midstream will have 1.5 bcfd of gas processing capacity in the core of the Montney area.
The new plants come as part of the Dawson midstream service agreement between CRP and Veresen Midstream, a 30-year, fee-for-service arrangement, which includes a production dedication to Veresen Midstream’s gathering system for CRP’s Montney natural gas production in a dedicated area of mutual interest (AMI) within the Montney resource play.
Since forming in early 2015, Veresen Midstream has agreed to undertake up to $5 billion (Can.) of midstream expansion to service CRP’s planned production growth within the AMI, including gas gathering pipelines, compression, and processing facilities.
As of late February, $3.6 billion (Can.) in capital projects have already been sanctioned under the agreement, Veresen Midstream said.
As part of the arrangement, Encana manages construction of new infrastructure within the AMI and, on a contracted basis, will operate gathering pipelines as well as compression and processing installations on behalf of Veresen Midstream.
While Veresen Midstream has agreed to assume operatorship of processing facilities at its option after an interim operating period, the company has retained the flexibility to increase capacity for new facilities to service third-party gas volumes.
Tower, Sunrise, Saturn
At a combined cost of about $2.5 billion (Can.) and all configured to process sweet gas from the Montney region, the Tower, Sunrise, and Saturn processing plants each are equipped with inlet separation, sand removal, and sales compression capabilities.
While the Sunrise and Saturn plants each will feature two shallow-cut propane refrigeration tanks, the Tower gas plant includes shallow-cut propane refrigeration with NGL-recovery capacity up to 20,000 b/d, according to Veresen Midstream’s web site.
Alongside NGL treating, the Tower plant also is equipped with 25,000 bbl of NGL storage as well as full-line rate delivery to Pembina Pipeline Corp.’s NGL system, including truck unloading of NGLs.
In May, Pembina entered a $7.1-billion stock-and-cash agreement to acquire Veresen in a deal scheduled to close—subject to approval under Canada’s Competition Act—in either late third quarter or early fourth quarter of this year (OGJ Online, May 1, 2017).
Contact Robert Brelsford at [email protected].
