Canada-based Pembina Pipeline has announced plans to invest about $125m to construct, own and operate a new shallow cut gas plant close to its Fox Creek Terminal located about 270km northwest of Edmonton.
The new 100 million cubic feet per day (MMcf/d) shallow cut gas plant Duvernay I is expected to have natural gas liquids (NGL) extraction capacity of about 5,500 barrels per day (bpd).
According to the company, the project is set to be operational in the second half of 2017 and is subject to regulatory and environmental approval.
Pembina Pipeline NGL and natural gas facilities senior vice-president Stuart Taylor said: "Pembina is very excited to be able to support the growth of the world class Duvernay resource play through the construction of the facility, which represents the first large-scale gas processing plant to be developed specifically for the Duvernay.
"In-spite of uncertainty in commodity markets, Pembina's customers continue to remain committed to the development of the Western Canadian Sedimentary Basin."
NGL production from the Duvernay I facility will be transported on the company's Peace Pipeline system under a long-term agreement.
Pembina said that the incremental volumes will serve to further improve its Peace phase III expansion project.
The project is expected to provide 420,000 bpd of incremental liquids transportation capacity from Fox Creek to Namao.
Additionally, the company executed an agreement for NGL fractionation at its Redwater Fractionation complex.
Upon completion of Duvernay I project, Pembina's gas services business is expected to have about 1.6 billion cubic feet per day of gas processing capacity and will produce over 75,000 bpd of NGLs for transportation.