Due to declining gas production in the area, the Nevis Gas Plant has officially decided to suspend operations. Keyera suspects this trend will not change in the short term.
The plant, approximately 28 km west of Stettler and 14 km east of Alix, has 25 employees and is expected to remain operational until it officially closes on Mon. Sept. 30.
“Keyera is working directly with each impacted employee on next steps including, where possible, relocation to other Keyera facilities,” said James Pratt, Area Manager for Rimbey-Nevis with Keyera.
Safe and orderly suspension of plant operations will start in the coming weeks.
“Keyera is working with the AER (Alberta Energy Regulator) to ensure effective and efficient site deconstruction and reclamation, and that activities are completed in accordance with a pre-approved plan,” continued Pratt.
Suspension of the operations commenced on Sept. 16, 2019 with the shut-down of the sulphur plant.
The Nevis Gas Plant was built in 1956 with Keyera acquiring the facility in 2008.
The County of Stettler is anticipating a large hit to its revenue base as the plant provides upwards of $400,000 annually in linear taxes.
“It will affect the county and the overall area,” began Stettler County Reeve Larry Clarke.
“There’s a bunch of other service job positions too and some that would be full-time and some that would be on an as-needed basis plus the suppliers. Just the local economy basis, it is going to be very noticeable.”
“One of the big things is that we don’t fully understand what the repercussions of it will be because they are sour gas producers that don’t have anywhere to put their gas to. Their only option is to do what the board will say to flare and if they don’t get flare permits then there is more wells shut-in and more jobs affected and the economic thing just keeps going,” said Clarke.
Reeve Clarke fears this shutdown will also affect landowners too as some who have well sites on their land receive rent from these companies.
If the wells are shut-in, these landowners will no longer receive the income from having them on their land.
“It’s very much a domino effect,” he said.
Keyera spoke with the county six months ago about taxes and a gradual shut down that may take place within the next seven years but were later informed on Sept. 10 that the plant was shutting down much sooner than expected.
“We were very surprised when we heard,” said Clarke.
Clarke suspects when Trident shut in all of their wells, roughly 25 per cent of Nevis’s customer base disappeared, adding to the decline in gas production.
Additionally, Trident’s wells supplied $2 million in tax revenue to the county combined with the shallow gas reassessment at $800,000 per year.
In total, the County of Stettler is going to see $3.2 million in lost revenue with the inclusion of the Nevis Gas Plant taxes.
“As counties, we’ve been meeting with government officials and industry people trying to figure out what we can do to try and get ahead of some of this stuff but in a case like this, the decision was made before any of us really had input.
“I know companies have to make rash decisions to stay financially viable but they had been a very respectable and ethical partner to our county for years right from the time they were V8 to Gulf,” said Clarke.