CALGARY, Oct. 1, 2019 /CNW/ - TransAlta Corporation
(TransAlta) (TSX: TA)(NYSE: TAC) and SemCAMS Midstream ULC
("SemCAMS"), a subsidiary of SemGroup Corporation (NYSE:SEMG)
announce today that they have entered into definitive agreements to
develop, construct and operate a new cogeneration facility at the
Kaybob South No. 3 sour gas processing plant. The Kaybob facility
is strategically located in the Western Canadian Sedimentary Basin
and accepts natural gas production out of the Montney and Duvernay formations. TransAlta will construct
the cogeneration plant which will be jointly owned, operated and
maintained with SemCAMS. The capital cost of the new cogeneration
facility is expected to be approximately $105 million and the project is expected to
deliver approximately $18 million in
annual EBITDA. 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.
The highly efficient cogeneration facility will have an
installed capacity of 40 MW. 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.
"We are very pleased to collaborate with SemCAMS on this project
which will enhance their operational and energy efficiency through
on-site cogeneration," said Dawn
Farrell, President and Chief Executive Officer of TransAlta.
"This project represents an important addition to our on-site
cogeneration business and we welcome SemCAMS as a valued new
customer and partner."
"We are excited to partner with TransAlta on this highly
strategic project which will enable SemCAMS to further reduce the
annual carbon emissions from its facility while lowering operating
expenses for the Kaybob 3 producers" said Dave Gosse, President of SemCAMS. "The
cogeneration facility is an important addition to SemCAMS' growing
midstream portfolio and furthers SemCAMS' focus on providing
reliable, low-cost processing solutions to our customers."
About TransAlta Corporation:
TransAlta owns,
operates and develops a diverse fleet of electrical power
generation assets in Canada,
the United States and Australia with a focus on long-term
shareholder value. TransAlta provides municipalities, medium and
large industries, businesses and utility customers with clean,
affordable, energy efficient and reliable power. Today, TransAlta
is one of Canada's largest
producers of wind power and Alberta's largest producer of hydro-electric
power. For over 100 years, TransAlta has been a responsible
operator and a proud community-member where its employees work and
live. TransAlta aligns its corporate goals with the UN Sustainable
Development Goals and has been recognized by CDP (formerly
Climate Disclosure Project) as an industry leader on Climate Change
Management. TransAlta is proud to have achieved the Silver
level PAR (Progressive Aboriginal
Relations) designation by the Canadian Council for
Aboriginal Business.
For more information about TransAlta, visit its web site at
transalta.com.
About SemCAMS
SemCAMS Midstream ULC is a
gathering and processing business that provides midstream solutions
from the wellhead to the wholesale market place in Western Canada. As one of Alberta's largest licensed gas processors,
SemCAMS Midstream owns and operates six gas processing plants
located in the heart of the Western Canadian Sedimentary Basin with
combined licensed capacity of approximately 2 billion cubic feet
per day. Strategically positioned to accept production out of the
Montney and Duvernay area, the assets include more than
700 miles of natural gas gathering and transportation pipelines as
well as oil gathering and emulsion. SemCAMS Midstream is based in
Calgary, Alberta and is a joint
venture between SemGroup
Corporation® (NYSE: SEMG) and
KKR.
Forward-Looking Statements
This news release
contains forward-looking statements and forward-looking information
within the meaning of applicable securities laws. The use of any of
the words "expect", "anticipate", "continue", "estimate", "may",
"will", "project", "should", "propose", "plans", "intends" and
similar expressions are intended to identify forward-looking
information or statements. More particularly, and without
limitation, this news release contains forward-looking statements
and information relating to: the development and construction of
the cogeneration facility at the Kaybob South No. 3 sour gas
processing plant; the construction and ownership of the
cogeneration plant by TransAlta; construction costs being equal to
approximately $105 million the
delivery of approximately $18 million
in annual EBITDA; the acquisition by SemCAMS of a 50% undivided
interest in the cogeneration facility on the commercial operation
date; the key terms of the definitive agreement and characteristics
of the cogeneration plant, including having electricity generating
capacity of 40 MW; a portion of the electricity generation being
sold into the Alberta market on a
merchant basis; the anticipated reduction in CO2e; the anticipated
commercial operation date. These statements are based on
TransAlta's and SemCAMS's beliefs and assumptions based on
information available at the time the assumptions were made,
including assumptions pertaining to: the operation of the Kaybob
South No. 3 sour gas processing plant; the Alberta energy-only market design; the current
environmental and carbon regulations; and no significant changes to
the labour market in Alberta.
These statements are subject to a number of risks and uncertainties
that may cause actual results to differ materially from those
contemplated by the forward-looking statements. Some of the factors
that could cause such differences include: failure to obtain
necessary regulatory approvals; delays in the construction of the
generation facility; increased construction costs; legislative or
regulatory developments, including as it pertains to carbon
pricing; changes in economic and competitive conditions; changes in
the demand and price for natural gas and electricity; and other
risk factors contained in the TransAlta's annual information form
and management's discussion and analysis. Readers are cautioned not
to place undue reliance on these forward-looking statements or
forward-looking information, which reflect TransAlta's and
SemCAMS's expectations only as of the date of this news release.
TransAlta and SemCAMS disclaim any intention or obligation to
update or revise these forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Note: All financial figures are in Canadian dollars unless
otherwise indicated.
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SOURCE TransAlta Corporation