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SemGroup unit signs processing deal to bring Alberta gas plant to 95% contracted

SemGroup Corp. gathering and processing unit SemCAMS ULC agreed with a Canadian subsidiary of an international oil and gas company to process sour gas production at its 200-MMcf/d Wapiti gas plant, which is expected to begin operations in the first quarter of 2019.

Under the take-or-pay deal, Calgary, Alberta-based SemCAMS will process 70 MMcf/d of Montney Shale gas for the unnamed company 10 years, according to a Dec. 13 release. With the agreement, the Wapiti gas plant becomes 95% contracted.

SemCAMS recently secured approval from the Alberta Energy Regulator to build a 280-MMcf/d sour gas plant in the Pipestone area, which will be connected to the Wapiti gas plant through the Pipestone pipeline. The pipeline is being built and is expected to be in service in the fourth quarter of 2019.

"This agreement underscores the need for our Wapiti gas plant and the unique services we are able to offer customers with our existing pipelines and sour gas processing plants," said Dave Gosse, vice president and general manager of SemCAMS. "With the Wapiti plant essentially fully contracted, we are increasing our focus on the Pipestone area development and look forward to continuing our work with producers and the community to safely and efficiently develop the Montney formation."