SemCAMS said it has reached an agreement with NuVista Energy to build a new sour gas processing plant in the Wapiti area, southwest of Grande Prairie, at an estimated cost of between $300 million and $350 million.

SemCAMS, the Calgary-based Canadian subsidiary of Tulsa, Okla.-based SemGroup Corp., said the Wapiti Gas Plant will have the capacity to process up to 200 million cubic feet of raw sour gas and 20,000 barrels of condensate per day.

Under terms of its 15-year agreement with NuVista, SemCAMS will process up to 120 million cubic feet of sour gas per day, on a take-or-pay basis.

Construction is expected to begin in the second quarter of 2017, and the plant is expected to be online by the second quarter of 2019, SemCAMS said. Negotiations are underway with other area producers to utilize the plant’s remaining capacity.

The new gas plant, combined with SemCAMS’s existing pipeline infrastructure in the area, will enable it to process 330 million cubic feet of gas per day from the Montney area.

glamphier@postmedia.com