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Blackbird Energy makes gas processing deal

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Hydrocarbon Engineering,

Over the past 18 months, Blackbird Energy Inc. has been evaluating multiple gas handling arrangements with several operators in the Grande Prairie region of Alberta, Canada. After extensive analysis and negotiation, the company identified Tidewater Midstream and Infrastructure Ltd as its preferred operator to achieve its long-term gas handling requirements. The companies have executed an agreement for firm processing of raw gas from Blackbird Energy’s condensate rich Pipestone/Elmworth Montney play.

They have agreed to an initial term of five years with firm capacity of 20 million ft3/d expected to commence in 2Q19, increasing to 25 million ft3/d 12 months after plant start-up and then to 30 million ft3/d 18 months after plant start-up.

Blackbird will have an option to acquire a working interest of up to 20% in Tidewater’s proposed deep cut sour gas processing facility located near Wembley, Alberta, which is expected to significantly reduce processing fees and establish Blackbird as a lower cost producer.

Tidewater is currently working toward a gas gathering system for Blackbird, and both companies are evaluating the construction of a gathering system that would tie-in volumes from the company’s Pipestone/Elmworth gas processing facility to the Tidewater facility.

The Tidewater facility is expected to have an initial processing capacity of 100 million ft3/d, with Blackbird serving as an anchor tenant. Additionally, Tidewater is proposing a 5% sour deep cut, and will work with Blackbird to obtain premium pricing for ethane, propane and all NGLs. Along with providing a long-term processing platform with the ability to grow, Blackbird’s agreement with Tidewater will address the company’s needs for fuel gas, provides an option for interim sweet gas storage and marks the beginning of a long-term business relationship.

Processing south of the Wapiti River

Blackbird has been negotiating with several parties to extend and expand processing capacity in the region. The company is also evaluating the construction of a gathering system that would tie-in volumes from Blackbird’s Elmworth facility to the Tidewater facility.

The company has completed all of the necessary public consultation and notification requirements to allow it to submit for regulatory approval to double the capacity of its Elmworth facility from 10 million ft3/d of natural gas and 1500 bpd of associated liquids. Additionally, the company is continuing to move forward with the expansion of its Eastern Pipestone/Elmworth gathering system, with construction expected to commence post regulatory approval. The gathering system will tie-in production from the company’s 2-20-70-6W6 (11-9 surface) well and service future development wells on Blackbird’s eastern lands south of the Wapiti.

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