SemCAMS to build sour gas processing plant in Canada

SemCAMS, a subsidiary of SemGroup, has entered into an agreement with NuVista Energy to proceed with a project that will include the processing of up to 120 MMcf/d of sour gas at a new gas plant SemCAMS will build in the Wapiti area of Alberta.

The 15-year agreement provides for take-or-pay obligations creating a significant backstop for the investment to be made by SemCAMS.

Construction on the project is expected to begin in the second quarter of 2017, and the total project cost estimate is approximately C$300 million to C$350 million. The Wapiti Gas Plant, licensed by the Alberta Energy Regulator in August, will have the capacity to process up to 200 MMcf/d of raw sour gas and 20,000 barrels per day of condensate. The new plant will utilize SemCAMS’ existing Wapiti/Simonette pipeline systems, which are connected to SemCAMS’ K3 and KA sour gas plants, to process approximately 350 tonnes per day of sulphur. This capability, which is unique to SemCAMS, provides a reliable long-term egress option for acid gas and the associated sulphur. The Wapiti Gas Plant is expected to be online by the second quarter of 2019. Negotiations are underway with other area producers to fully subscribe the remaining plant capacity.

With both the new Wapiti Gas Plant and SemCAMS existing pipeline infrastructure, SemCAMS will be able to process 330 MMcf/d of Montney gas production, with additional expansion options available. The K3 and KA gas plants are licensed to process approximately 3000 tonnes per day of combined sulphur handling, providing additional sour gas processing options for area producers.

“We are pleased to announce our plans to build the new Wapiti Gas Plant, and the significant expansion of our commitments for a true win-win with our growth oriented customer, NuVista Energy,” said David Gosse, SemCAMS’ Vice President and General Manager. “Our safe and reliable history of operating sour gas plants and our existing infrastructure gives our customers a substantial advantage. This is an exciting project for SemCAMS, and another significant milestone in our strategic growth plans to meet the midstream needs of producers in the world class Montney and Duvernay plays.”