Meritage Midstream Services is building new natural gas and crude oil infrastructure in Western Canada.

The company’s Canadian affiliate, Meritage Midstream Services III, has entered into definitive agreements with Canadian International Oil Corporation (CIOC) to build natural gas gathering, compression and processing assets and a crude oil gathering pipeline to serve CIOC’s production in the Alberta Deep Basin, including the Montney and Duvernay shale plays.

Meritage will provide 75 million cubic feet per day (MMcf/d) of gas gathering and processing capacity, which could be increased to 225 MMcf/d in the future, and up to 10,000 barrels per day (bpd) of crude oil gathering capacity.

The new gas processing plant will be located approximately 60 miles south of Grand Prairie, Alberta, and will be connected to a 42-kilometer high-pressure gas gathering system. The plant is expected to start operating in April 2016 and will offer connections for residue gas to the TransCanada Pipeline and other delivery points, Meritage said.

The 37-kilometer crude oil gathering system is planned to follow the same route as most of the gas gathering pipeline and will connect to Pembina Pipeline Corporation’s Karr Lateral pipeline, serving 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. 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,” commented Meritage CEO Steve Huckaby, who also serves as CEO of Meritage III.