Keyera Corp. is moving ahead with the first phase of its Wapiti natural gas gathering and processing complex south of Grande Prairie, Alberta for $470 million.
The sanctioning was made possible after Keyera finalized area dedication agreements and long-term take-or-pay commitments with its primary customer (not named), which was the main obstacle delaying Keyera’s positive final investment decision, according to GMP FirstEnergy.
The announcement was previously expected in the first quarter.
“Management will continue discussions with other third party producers in the region in an effort to secure additional volumes and sanction the second phase of the Wapiti facility,” the energy investment bank says.
Part of the $470 million sanctioning includes the build-out of certain infrastructure to support the second phase of development. Together with Phase 2, the complex is expected to cost $625 million, supporting growing volumes of liquids-rich Montney natural gas production.
The first phase of the complex includes a 150 mmcf/d sour gas processing plant with acid gas injection capabilities, 25,000 bbls/d of condensate processing facilities, a gathering pipeline system and field compressor stations.
Start up is expected in mid-2019.
Pending Keyera’s ability to secure agreements to handle additional volumes, the second phase of the project would add another 150 mmcf/d of sour gas processing capacity and extend the gathering system at an incremental cost of approximately $155 million.
The second phase is expected to come on stream in 2021.
"This project, along with our Wapiti pipeline and Simonette gas plant, increases our presence in one of the most exciting developments in the Western Canada Sedimentary Basin,” Bradley Lock, Keyera's senior vice president of gathering and processing, said in a statement.