SemCAMS Midstream ULC has entered into an asset joint venture with Keyera Corp. to build an NGL and condensate pipeline system connecting the liquids-rich Montney and Duvernay shale production areas of northwestern Alberta to fractionation and condensate hubs in Fort Saskatchewan, Alta. The joint venture replaces SemCAMS Midstream’s previously announced Montney to Market (M2M) pipeline. SemCAMS Midstream and Keyera will be equal partners on the project, with Keyera acting as operator.
Current project scope includes a 16-in. OD condensate pipeline and a 12-in. PD NGL pipeline, connecting to both third-party sites and Keyera and SemCAMS Midstream sites. Keyera and SemCAMS Midstream expect to have nine gas plants operating in the area by 2022, with access to 2.25 bcfd of gas processing and 130,000 b/d of condensate handling capability between Pipestone and Kaybob, Alta. The project is targeted to become operational in first-half 2022, with most capital spending occurring second-half 2020 into 2021.
The project is supported by multiple long-term firm service agreements, averaging 14 years and representing 60% of initial pipeline capacity. The firm-service agreements are underpinned by 75% take-or-pay commitments as well as specific facility and area dedications. Discussions are under way with additional producers for incremental volumes. The pipeline can be expanded with additional pump stations to meet future capacity requirements.
SemCAMS estimates total cost for the project at $1.3 billion (Can.).
SemCAMS Midstream was formed in this year’s first quarter and continues to expand its footprint in the Montney and Duvernay shales. SemCAMS Midstream owns and operates about 1.1 bcfd of natural gas processing capacity, increasing to roughly 1.3 bcfd later this year with expected completion of its Patterson Creek Plant expansion and Smoke Lake Plant.
