The Tower Rich gas processing complex is the second major new gas plant now under construction as part of the Veresen Midstream Limited Partnership development. — Photo courtesy Veresen
Veresen Inc. (TSX:VSN) today announced that the Cutbank Ridge Partnership ("CRP") has sanctioned the $715 million Tower rich gas processing complex ("Tower"), which is the second major new gas plant now under construction as part of the Veresen Midstream Limited Partnership ("Veresen Midstream") infrastructure development.
Veresen now has $1 billion net of growth projects under construction, including Tower and the previously announced Sunrise gas plant, the Burstall ethane storage facility and the Aux Sable fractionation expansion. Additionally, construction of the 40-MW Grand Valley Wind Farm Phase III has been completed ahead of schedule and under budget, and was placed into operation on December 3, 2015.
The Tower rich gas processing complex 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. Tower will be located south of Fort St. John in northeastern British Columbia and will process rich gas from the prolific Montney resource play.
The Montney remains western Canada's most actively developed gas resource play and continues to deliver strong results even against a challenging macro environment. The estimated capital cost for the Tower gas processing plant, liquids recovery, storage and other ancillary facilities is $715 million, with the plant expected to be in service in late 2017.
Veresen Midstream will fund 55% to 60% of Tower's construction costs with its existing $1.275 billion credit facility, which is largely undrawn, with the balance to be contributed over time by Veresen and KKR. Veresen intends to fund its share of future contributions to Veresen Midstream with ongoing proceeds received from equity issued in connection with Veresen's Premium Dividend™ and Dividend Reinvestment Plan.
