SemCAMS, a subsidiary of SemGroup(R) Corporation (SEMG), announced that it will extend its capture area into the Duvernay region through the construction of the low sour gas gathering line, to be named the "KA North" pipeline, from 7-14-63-20 W5M to the KA plant. The project also includes the construction of a new inlet separator at the KA plant. The total estimated cost of these initiatives is expected to be approximately $18 million (Cdn).
The KA North pipeline is underpinned by a fee-for-service natural gas gathering and processing agreement with Shell Canada ("Shell"). SemCAMS will own 60 percent of the KA North pipeline which is expected to be in service by June 2014, pending regulatory approvals and delivery of long lead items on a timely basis. The KA North pipeline consists of a 16 kilometer, 10 inch sour gas gathering pipeline with 125 mmcf/d of capacity. SemCAMS will operate the pipeline, which will be able to serve other customers in the area.
The KA plant is located in the heart of the Duvernay region, where producers are actively drilling for liquids-rich gas. By extending its reach targeting the Duvernay formation in the Kaybob Area, SemCAMS hopes to attract incremental volumes to the KA plant where there is available processing capacity and an additional 11,000 bbls per day of condensate stabilization capacity that could be restarted.
"We are excited about this opportunity to extend the capture area and increase our inlet hydrocarbon liquids handling capacity at the KA gas plant to meet the needs of our customers. The KA North pipeline and inlet separator projects are consistent with our goal of re-tooling the existing infrastructure to capture incremental liquids-rich gas in the Duvernay area," says Dave Williams, SemCAMS' General Manager.