Veresen Midstream announced the sanctioning of two new capital projects by the Cutbank Ridge Partnership (CRP) related to ongoing development plans northeastern British Columbia, Canada, while also minimizing total infrastructure costs and surface footprint. The projects are valued at $195 million.
The South Central Liquids Hub project will to allow the existing gathering system in the area to handle development anticipated over the next several years and is expected to be in service by the end of the second quarter of 2017. The hub can be expanded to meet CRP’s long-term liquids handling needs and provide services to third-party producers in the area.
The second project, the Tower Liquids Hub will provide a lower cost and more commercial flexiblity for handling and storaging of NGLs produced at the Sunrise, Tower and Saturn Phase II processing facilities. The project includes infrastructure to deliver the NGLs into a third-party system and is expected in service in the third quarter of 2017. Part of the Tower Liquids Hub will include capacity to handle third-party NGLs to trucked in or connected directly by a future pipeline.
“As Veresen Midstream’s capital projects come into service, the significant increase in cash flow will reduce Veresen’s leverage and bolster our financial flexibility to fund new growth opportunities generated from our strong footprint in the heart of the Montney play,” said Don Althoff, president and CEO of Veresen.
Both the South Central Liquids Hub and the Tower Liquids Hub are governed by a service agreement with Dawson Midstream, which is in place for the next 28 years.