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Meritage Builds Infrastructure for Canadian Shale Development

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A Denver-based midstream company is helping western Canada expand its shale oil and gas development infrastructure.

meritagelogoMeritage Midstream Services announced Aug. 11 that its Canadian affiliate, Meritage Midstream Services III LP, has entered into definitive agreements with Canadian International Oil Corp. (CIOC) to build natural gas gathering, compression and processing assets and crude oil gathering assets to support the development of CIOC’s Montney and Duvernay shale positions in Alberta. Meritage III will provide 75 million cubic feet per day (MMcf/d) of gas gathering and processing capacity, which will be expandable to 225 MMcf/d, and up to 10,000 barrels per day (bpd) of crude oil gathering capacity.

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Construction of both systems began in May. The 42-km high-pressure gas gathering system will deliver rich gas to the new processing plant, which will be located approximately 60 miles south of Grand Prairie, Alberta. The plant is expected to come into service in April 2016 and will offer connections for residue gas to the TransCanada Pipeline and other delivery points. The 37-km crude oil gathering system follows the same route as most of the gas gathering pipeline and will connect to Pembina Pipeline Corp.’s Karr Lateral pipeline, which will serve Pembina’s terminal in the Lator area of northwest Alberta.

“The Montney and the Duvernay are poised to become two of the most prolific plays in North America, and CIOC is one of the most prominent and active oil and gas operators in Western Canada,” said Meritage CEO Steve Huckaby, who also serves as CEO of Meritage III. “These important agreements establish our position in the region and allow us to continue to focus on developing the infrastructure needed to stay ahead of the immediate and long-term needs of our Canadian customers.”

Meritage also announced that industry veteran Michael A. Hantzsch has come out of retirement to join the company as senior vice president of its Canada operations. He has more than 37 years of experience in the energy industry with a focus on Canada. He will lead Meritage’s Canadian office, which will open soon in Calgary. Hantzsch started his career with Shell Canada Ltd. and has held senior positions with a number of energy companies including Williams Energy, Provident Energy and, most recently, Pembina Pipeline. He retired from Pembina Pipeline in December 2014.

“It took the best of the best to bring me out of retirement,” Hantzsch said. “I have tremendous respect for the Meritage team and the company’s outstanding track record. The opportunity to join Meritage and help grow the Canadian business unit from the ground up is very exciting and one I just couldn’t pass up.”

Based in Denver with offices opening soon in Calgary, Meritage Midstream Services III provides oil and gas producers in Western Canada with a full complement of midstream services. Capabilities include the gathering, compression, treating, processing, fractionation, storage, transportation and marketing of natural gas, NGLs and condensate; crude oil gathering, blending, storage, transportation and marketing; and transportation and handling for frac sand and produced water.

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