Bellatrix sells 35% stake in Canada’s deep-cut gas plant to Keyera Partnership

Bellatrix Exploration has completed the previously announced sale of a 35% stake in the Bellatrix O'Chiese Nees-Ohpawganu'ck deep-cut gas plant at Alder Flats in Alberta, Canada, to Keyera Partnership for C$112.5m ($86m).

The company plans to use net proceeds from the sale of the Alder Flats plant to reduce the indebtedness under its credit facilities.

The Alder Flats plant has a design capacity of 230 million standard cubic feet per day (mmcf/d) and is being developed in two phases.

Phase 1 of the plant was built with design capacity of 110mmcf/d and was commissioned in May last year, while phase 2 is currently under construction and is slated for completion in the first half of 2018.

Commissioning of the plant involved operational and functional unit testing, pressure testing and purging, initial plant start up and performance testing.

Bellatrix completed mechanical, instrument, and electrical pre-commissioning work at the plant in addition to final pressure testing and purging.

As part of the deal announced last month, Bellatrix and Keyera signed a midstream services and governance agreement, pursuant to which the former will gain access to the purchased capacity for ten years.

The company also agreed to remain the plant's operator and will now retain a 25% interest in Alder Flats.

Completion of Alder Flats is expected to provide improved operational control and improved reliability of processing.

Natural gas volumes to the plant will be sourced from both behind pipe volumes that are constrained from area processing within the greater Ferrier region, the company commented.