Provident Energy, AltaGas to build rich-gas pipeline to serve the Montney Shale of British Columbia

Source: Provident Energy

Provident Energy Ltd. (TSX:PVE) (NYSE:PVX) has signed an agreement with AltaGas Ltd. and a senior producer, to construct a 16-inch rich-gas pipeline from a Montney gas plant to the AltaGas/Provident Younger deep cut natural gas processing facility in northeastern British Columbia. 

The 25-kilometer Younger Septimus Pipeline will serve as a trunk line to support the gathering of up to 250 million cubic feet per day (mmcfd) of natural gas from the liquids-rich Montney area. Provident estimates the pipeline will become fully operational by the fourth quarter of 2011. 

The Younger facility is the only deep cut extraction plant in British Columbia. The facility provides recoveries of up to 80 percent of the ethane and 99 percent of propane-plus liquids entrained in the natural gas stream. Producers should benefit from improved netback prices for produced natural gas and increased barrel equivalent production, likely making the new Younger Septimus pipeline a preferred shipping option for many Montney area producers. 

Under the agreement, Provident and AltaGas will each own a 30 percent interest in the project and have a combined 152 mmcfd of firm shipping capacity. The estimated cost to complete the pipeline is approximately $30 million, of which Provident has committed $9 million.

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