Keyera Corp., Calgary, has entered an agreement to double its ownership interest in the O’Chiese Nees-Ohpawganu’ck deep-cut natural gas processing plant and related pipelines in the Alder Flats in west-central Alberta (OGJ Online, Dec. 2, 2014).
Keyera will acquire an additional 35% ownership interest in the gas plant and associated pipelines from partner Bellatrix Exploration Ltd., also of Calgary, for a total of $112.5 million, as well as prepayment of 35% of estimated future construction costs for a second phase of the plant now under construction, Keyera said.
As part of the transaction, Bellatrix and Keyera also will enter into a midstream services and governance agreement under which Bellatrix will have exclusive access to the purchased capacity—about 80.5 MMcfd post-commissioning of Phase 2—for a term of 10 years, Bellatrix said.
Upon closing, Keyera will own 70% of the operations, with Bellatrix to continue on as acting operator for the project.
Alongside retaining a 25% ownership interest in the project, Bellatrix additionally will have the option to reacquire a 5% interest in the gas plant at a cost of $8 million near expiry of the Alder Flats construction, ownership, and operating agreement, the operator said.
The companies said they expect to complete the transaction in August.
On stream in mid-2015, Phase 1 of the gas plant has a design inlet capacity of 110 MMcfd.
Phase 2 will add a design inlet capacity of 120 MMcfd with a targeted on stream date during first-half 2018, according to the companies.
Contact Robert Brelsford at [email protected].