​Plains, SemCAMS proposing new 100,000 bbl/d Montney liquids pipeline

New system would leverage complementary assets: analysts

Image: Joey Podlubny/JWN

Plains Midstream Canada and SemCAMS are proposing to build a large new pipeline to deliver natural gas liquids, light oil and condensate from the Montney play in west-central Alberta to the Edmonton region.

The companies have received enough customer interest to proceed with an open season for the project, they said on Wednesday. The project would have initial capacity of 100,000 bbls/d and would be expandable to 200,000 bbls/d.

Working together makes sense for the two companies, according to GMP FirstEnergy analyst Ian Gillies. SemCAMS has been building its Montney exposure through the construction of a number of gas plants, and Plains owns a fractionator in Fort Saskatchewan that has been running well below capacity.

“As a result, both parties would be able to better leverage their complementary assets,” Gillies wrote in a research note.

The project would include a combination of new and existing pipelines, the companies said. Its development could be a negative for Plains/SemCAMS competitors in the region, Gillies noted.

“This project will compete with Pembina Pipelines’ Peace Pipeline System and customers may look to divert newly contracted volumes from new phases of Pembina’s system in an effort to diversify service providers,” he wrote.

“This may also be considered a negative for Keyera as we believe they had been exploring a liquids pipeline from the Montney (Wapiti) area to Edmonton.”

Engagement with affected parties, including the regulators, is ongoing with the intent to submit a regulatory application in the second quarter of 2019, subject to the closing of a successful open season process. The project is targeted to become operational in the fourth quarter of 2020.