Veresen Inc. said Dec. 7 that the second major new gas plant in Canada’s Montney Play has won approval.
The Tower rich gas processing complex has been sanctioned by the Cutbank Ridge Partnership, a collaboration between Veresen, Encana Corp. (NYSE: ECA) and a subsidiary of Mitsubishi Corp.
The Tower plant will be located in northeastern British Columbia and will process rich gas from the prolific Montney resource play. It will have capacity for 200 million cubic feet per day (MMcf/d) of rich gas and up to 20,000 barrels per day of condensate and NGL.
The estimated cost of the plant is C$715 million. The plant is expected to be in service in late 2017.
Veresen Midstream LP will fund 55-60% of Tower’s construction costs with its existing C$1.3 billion credit facility, which is largely undrawn. The balance will be contributed over time by Veresen and Kohlberg Kravis Roberts & Co. LP (KKR).
Veresen Midstream is owned 49% by Veresen and 51% by affiliates of KKR.
Including the Tower plant, Veresen now has C$1 billion net of growth projects under construction, according to the release.