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Veresen Inc. announced that the Cutbank Ridge Partnership has approved the 400 million cubic feet per day Sunrise gas plant for the Montney region, near Dawson Creek.

Construction of the plant has begun, with it expected to be running in the last quarter of 2017.

Veresen Midstream has invested approximately $130 million in the facility to date and will fund approximately 60% of the Sunrise gas plant’s construction costs with its existing $1.275 billion credit facility – Veresen and Kohlberg Kravis Roberts & Co. LP will be contributing to the balance over time.

“Within Veresen Midstream’s footprint in the Dawson Creek area, development activity continues to be strong, driven by very low supply costs for Montney gas production in the region,” added Don Althoff, President and CEO of Veresen. “I’m excited about the growth potential of Veresen Midstream and the contribution of this business to Veresen’s earnings profile.”

President and CEO of Veresen Midstream David Fitzpatrick said the Sunrise gas plant is’ the largest gas plant to be commissioned in western Canada in the last 30 years.’

The Cutbank Ridge Partnership is a partnership between Encana Corporation and Cutbank Dawson Gas Resources Ltd.

In late 2014, Veresen Midstream Limited Partnership (owned 50% by Veresen, and 50% by affiliates of KKR & Co. L.P.) entered into a fee-for-service arrangement with Encana and CRP, to undertake up to $5 billion of new midstream expansion for those parties in the Montney region – with the Sunrise gas plant being the first project under the agreement.

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