(Reuters) - U.S. energy infrastructure company Williams (WMB.N) said on Wednesday it has signed a long-term gas processing agreement with a producer in the Canadian oil sands.
Under the deal, Williams will extract, transport, fractionate, own and market natural gas liquids (NGLs) and olefins from the producer’s upgrader near Fort McMurray, Alberta.
Williams said it expects to recover about 12,000 barrels per day (bpd) by mid-2015, growing to 15,000 bpd by 2018.
The Tulsa, Oklahoma-based company did not name the Canadian oil sands producer in its press release and a spokesman was not immediately available for comment.
Propane recovered will be sold into the local market and would potentially be used as feedstock at Williams’ proposed propane dehydrogenation facility in Canada. The other products will be sold into the established markets where Williams sells existing NGLs and olefins produced in Canada.
Williams said it plans to build a new liquids extraction plant and supporting facilities at the oil sands producer’s upgrader. It also plans to extend its Boreal Pipeline to transport the NGL/olefins mixture to its expanded Redwater facility near Edmonton.
The total capital expenditure for the project is expected to be C$500 million to C$600 million, the company said.
Reporting By Steve James; Editing by Sofina Mirza-Reid