SemCAMS Midstream ULC

SemCAMS Midstream ULC in its 50/50 joint venture with TransAlta Corporation to develop Kaybob South Cogen Facility

Client

SemCAMS Midstream ULC

Value

$105 million

Date Closed

Industry

Energy (Electrical Power)

Lead Office

Calgary

 

On October 1, 2019, SemCAMS Midstream ULC announced that they have entered into definitive agreements with TransAlta Corporation to develop, construct and operate a new cogeneration facility with an installed capacity of 40MW at the Kaybob South No. 3 sour gas processing plant, which will cost approximately $105 million. TransAlta will be responsible for all capital costs during construction and, subject to the satisfaction of certain conditions, SemCAMS will purchase a fifty percent (50%) interest in the new cogeneration facility as of the commercial operation date, which is targeted for late 2021. All of the steam production and approximately half of the electricity output will be contracted to SemCAMS under a 13-year fixed price contract. The remaining electricity generation will be sold into the Alberta Power market by TransAlta. The agreement contemplates an automatic 7-year extension subject to certain termination rights. The development of the cogeneration facility at Kaybob South No. 3 will eliminate the need for traditional boilers and reduce annual carbon emissions of the operation by approximately 100,000 tonnes CO2e, which is equivalent to removing 20,000 vehicles off Alberta roads. This highly strategic project will enable SemCAMS to further reduce the annual carbon emissions from its facility while lowering operating expenses from the Kaybob 3 producers, enabling the Company to focus on providing reliable, lower-cost processing solutions to their customers.

SemCAMS Midstream ULC is a Calgary-based gathering and processing business that provides midstream solutions from the wellhead to the wholesale marketplace in Western Canada.

Osler, Hoskin & Harcourt LLP advised SemCAMS Midstream ULC with a team led by Paula Olexiuk (Energy) and consisting of Craig Spurn (Corporate), Lorne Carson and Allan Morgan (Banking), Colena Der and Alan Kenigsberg (Tax), Tommy Gelbman and Martin Ignasiak (Litigation), Rob Housman and Bryce Kustra (Real Estate) and Lindsay Hofer, Luke Stretch and Storme McKop (Articling Students).