NuVista Energy Ltd. Announces Pipestone North Egress and Processing Agreements
CALGARY, Alberta, Nov. 01, 2018 (GLOBE NEWSWIRE) -- NuVista Energy Ltd. (“NuVista” or the “Company”) (TSX:NVA) is pleased to announce that it has entered into an agreement as anchor tenant with Veresen Midstream Limited Partnership (“Veresen” or “VMLP”) for firm transportation and processing of 100 MMcf/d of raw gas from our newly acquired Pipestone North block of lands. The processing capacity will be added in two incremental steps of 50 MMcf/d, each commencing in late 2020 and late 2021. NuVista has the flexibility to push the timing of half of the 2021 tranche to 2022 if desired. The 15 year agreement is underpinned by 80% take-or-pay terms which provides flexibility to produce above or below these firmly contracted amounts. The capacity will be provided by the expansion of the Veresen owned Hythe Gas Plant to accommodate an additional 100 MMcf/d of raw gas, and the construction of a new sour gas pipeline connecting a portion of NuVista’s Pipestone North production to the Hythe Gas Plant.
In addition, NuVista has entered into an agreement with a third party shipper for firm transportation service on Alliance Pipeline to Chicago for natural gas sales volumes from the first tranche of raw processing capacity starting late 2020 for a minimum period of 10 years at posted tolls. Natural gas transportation for the second tranche of processing commencing in 2021 is expected to be provided on the NGTL system with normal three-year advance application timing. Pembina will also provide transportation of all NuVista C3+ and C5+ (condensate) on intra-provincial pipelines for delivery into the Edmonton area from both the Veresen Hythe and SemCAMS Wapiti plants as well as our NuVista compressor stations in those areas. Additionally, Pembina will provide associated processing services for the C3+ at the Redwater Fractionation and Storage facilities, all at competitive rates.
In order to supply these agreements, NuVista will construct and operate a 100 MMcf/d compression and dehydration facility on the Pipestone North lands with a size and design similar to our existing Bilbo or Elmworth facilities. In pursuit of maintaining maximum balance sheet flexibility, NuVista has retained an option to have the capital cost of this facility funded by VMLP. When added to our existing capacity, this agreement will expand NuVista's total area firm processing capacity to approximately 420 MMcf/d of raw gas by the end of 2021 with firm egress for all sales natural gas, condensate, and C3+ liquid products. This corresponds to growing the total NuVista firmly contracted processing and egress capacity from approximately 70,000 to 90,000 Boe/d.