Gas plant near Dawson Creek will be largest in decades

Veresen's $860 million Sunrise Gas plant will feed gas to Alberta pipeline

Western Canada's largest gas plant in 30 years will be built in the middle of an oil downturn.

On Tuesday, Veresen Midstream announced plans to build its $860 million Sunrise Gas plant near Dawson Creek. 

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The plant will deliver 400 million cubic feet of gas per day to TransCanada's Nova Gas Transmission Line—a massive pipeline network that services Alberta and other North American customers.

Veresen Chief Financial Officer Theresa Jang understands that the timing might seem a bit confusing.

"It's something of a bright spot in what are otherwise pretty challenging conditions," she said of the Montney shale formation. "Although the broader environment is challenged, there are areas, particularly in the Montney, where producers are still undertaking a lot of activity."

Encana's Cutbank Ridge Partnership, which includes Mitsubishi, will supply the gas from fields in the South Peace.

Despite the collapse in natural gas prices, those companies remain active, Jang said.

"The area Encana and the Cutbank Partnership are drilling out of is one of the most prolific regions to drill for natural gas on the continent," she said. "It's very, very economic for them to drill even where gas prices are today."

While Veresen is involved in an LNG plant in Oregon, Jang said it's likely most of the gas would be used in North America, where prices are lower.

"Odds are it will stay on the continent somewhere, but once it hits a major hub like AECO (a storage facility in southern Alberta) it's impossible to say where it would go."

Jang did not have firm estimates for jobs numbers, but said the facility would have a major impact on the South Peace economy. 

Work has already begun on the project, with a completion date set for 2017.

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