Encana Corporation has reached a deal with Pembina Pipeline Corporation to invest about $230 million to expand the Resthaven natural gas processing plant in west central Alberta.
Encana Corporation has reached a deal with Pembina Pipeline Corporation to invest about $230 million to expand the Resthaven natural gas processing plant in west central Alberta.
“This is the third step in our well-developed plans to capture additional value from our liquids-rich natural gas production in Alberta’s Deep Basin,” said Renee Zemljak, Encana’s executive vice-president, marketing, midstream and fundamentals.
“Over the next number of years, we expect our NGLs (natural gas liquids) extraction to triple from about 10,000 barrels per day to about 30,000 barrels per day following investment by industry-leading third-party midstream companies at three Alberta Deep Basin plants.”
The latest step in Encana’s plan to increase natural gas production in Alberta’s Deep Basin is a project with Pembina to modify and expand the Resthaven gas plant. The Resthaven area, located in west central Alberta, is known for supplying natural gas that is rich in other liquids.
The project involves taking the existing “shallow cut” gas plant and developing the capacity for enhanced liquids extraction, by adding “deep cut” facilities.
This means Encana can add value to their natural gas production due to the increase in price that is generated when Pembina extracts the higher-value ethane, propane, butane and condensate.
“The Resthaven facility represents a strategic step in building out our gas services business” said Bob Michaleski, Pembina’s president and CEO.
“And, as is the goal with all of our projects, this opportunity will generate additional value through integration with our conventional pipelines and midstream and marketing services.”
Pembina plans to construct a 44 kilometre, 6 inch diameter natural gas liquids (NGL) pipeline to transport the extracted liquids from the Resthaven facility to Pembina’s Peace Pipeline.
That pipeline delivers product into Edmonton, Alberta.
Subject to regulatory approval, Pembina expects the new facilities to be in-service in late 2013.
Once operational, the initial phase of the Resthaven facility will have gross capacity of 200 million cubic feet per day (mmcf/d) and 13,000 barrels per day of liquids extraction capability, with ultimate capacity of 300 mmcf/d.
Pembina’s investment in the Resthaven facility is supported by long-term service agreements with major area producers, such as Encana.
About 65 per cent of the Resthaven Facility will be owned by Pembina, while the company will own 100 per cent of the NGL Pipeline.
Another step in Encana’s NGL extraction strategy was taken in late 2010 when Encana made another deal with a midstream company to construct a new 120 mmcf/d natural gas processing plant in the Gordondale area, about 100 kilometres northwest of Grande Prairie, Alberta.
Encana expects to extract an additional 3,000 barrels per day to 4,000 barrels per day of NGLs from the Gordondale plant, which is expected to be in service in late 2012.
The first step in Encana’s extraction initiative is the start up in December of the Musreau natural gas processing plant, which is located about 30 kilometres northwest of the Resthaven facility.
Encana expects to add about 5,000 barrels per day of NGLs production from the expanded Musreau facilities.
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