Natural gas processor SemCAMS says it will build a new gas plant near Fox Creek, Alberta to support new contracts signed with a joint venture between Murphy Oil and Athabasca Oil Corporation.
The Smoke Lake Gas Plant will have capacity to process 60 mmcf per day of sweet and sour Montney and Duvernay gas and is expected to be operational in the fourth quarter of 2019, SemCAMS said in a statement.
Following the completion of the Smoke Lake Gas Plant and the Wapiti Plant currently under construction, SemCAMS said it would have a combined 1.7 bcf per day of sour gas processing capacity licensed in Canada.
Murphy and Athabasca entered into a joint venture to develop Montney and Duvernay assets in spring 2016, when Athabasca sold a 70 percent interest in its Greater Kaybob area assets and a 30 percent interest in its Greater Placid area assets for gross proceeds of $486 million.
In the Duvernay at Kaybob, the joint venture plans to spend $357 million in 2018 including rig releasing 24 wells, completion operations on 27 wells and placing approximately 24 wells on production.
Athabasca plans to spend $40 million at its operated Placid region in 2018 including completing a six well development pad and drilling six infill wells in the first quarter.