Cutbank Ridge approves $860m sunrise gas plant in Canada

Cutbank Ridge Partnership (CRP), a partnership between Encana and Cutbank Dawson Gas Resources has approved the $860m sunrise gas plant to be located in the Montney region near Dawson Creek in northeastern British Columbia, Canada.

Veresen Midstream signed a fee-for-service arrangement in late 2014 with Encana and CRP to undertake up to $5bn of new midstream expansion for the companies in Montney.

The Sunrise gas plant, which will be the first newly sanctioned project under the agreement, would have a capacity to produce 400 million ft³ of gas a day.

Veresen Midstream, 50% owned by Veresen and 50% owned by affiliates of Kohlberg Kravis Roberts (KKR), has invested about $130m in the facility to date and plans to use its existing $1.2bn credit facility to fund about 60% of its construction costs.

The remaining funding would be provided by Veresen and KKR.

The project management as well as construction the facility construction would be handled by Encana on behalf of Veresen Midstream.

Construction of the gas plant has commenced and facility is expected to be operational in late 2017.

Veresen Midstream president and CEO David Fitzpatrick said: "Upon start-up of the Sunrise plant, Veresen Midstream’s footprint in the Montney will grow substantially, and we look forward to continuing to work with Encana and CRP, as well as other producers in the region, to unlock the value of this important resource play."

CRP is expected to go ahead with a final investment decision for the 200 mmcf/d tower gas plant in late 2015.

The company also proposes to add an incremental 200 mmcf/d of compression and 400 mmcf/d of refrigeration capacity to the Saturn compressor site.

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Image: The gas plant will produce 400 million ft³ a day. Photo: courtesy of John Kasawa/ FreeDigitalPhotos.net.