SemCAMS to develop new sour gas processing plant in Alberta

SemGroup Corporation subsidiary SemCAMS has entered into an agreement with NuVista Energy to develop a project in the Wapiti area of Alberta.

Licensed by the Alberta Energy Regulator in August, the new plant will possess the capacity to process up to 200 million standard cubic feet a day (mmcf/d) of raw sour gas and 20,000 barrels per day of condensate.

The total project cost is approximately C$300 million to C$350 million.

It is expected that project construction will begin from the second quarter of 2017.

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

The new plant will use SemCAMS’ existing Wapiti / Simonette pipeline systems connected to SemCAMS’ K3 and KA sour gas plants to process around 350t of sulphur per day.

This feature provides a reliable long-term egress option for acid gas, as well as the sulphur.

The new plant is expected to come online by the second quarter of 2019.

SemCAMS vice president and general manager David Gosse said: “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.

“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.”

With both the new Wapiti Gas Plant and SemCAMS existing pipeline infrastructure, SemCAMS will be able to process 330mmcf/d of Montney gas production.