Meritage to build crude oil, natural gas assets in Western Canada

The Canadian affiliate of Meritage Midstream Services, Meritage Midstream Services III LP, has entered into definitive agreements with Canadian International Oil Corp. (CIOC) to build natural gas gathering, compression, and processing assets, as well as crude oil gathering assets, to support the development of CIOC’s Montney and Duvernay shale positions in west-central Alberta.

Meritage III will provide 75 million cubic feet per day (MMcf/d) of gas gathering and processing capacity, which will be expandable to 225 MMcf/d, and up to 10,000 barrels per day (b/d) of crude oil gathering capacity.

Construction of both systems began in May. The 42-kilometer high-pressure gas gathering system will deliver rich gas to the new processing plant, which will be located 60 miles south of Grand Prairie, Alberta. The plant is expected to come into service in April 2016 and will offer connections for residue gas to the TransCanada Pipeline and other delivery points.

The 37-kilometer crude oil gathering system follows the same route as most of the gas gathering pipeline and will connect to Pembina Pipeline Corp.’s Karr Lateral pipeline, which will serve Pembina's terminal in the Lator area of northwest Alberta.

Michael Hantzsch has joined the company as senior vice president to lead Meritage Midstream’s Canadian headquarters, which is soon to open in Calgary. Hantzsch has more than 37 years of experience in the energy industry with a focus on Canada. Most recently, he served as vice president of oil sands and heavy oil at Pembina Pipeline Corp. He retired from Pembina Pipeline in December 2014. Hantzsch is a graduate of the University of Toronto, where he earned a bachelor’s degree in chemical engineering.

Meritage Midstream III is backed by $300 million in equity commitments from funds managed by Riverstone Holdings LLC.

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