The developer of a sour gas processing plant in Canada has identified a buyer for a 32 MW onsite cogeneration facility that will provide it with generation and heat under a long-term contract.

Tidewater Midstream and Infrastructure is developing the Pipestone Gas Plant project near Grande Prairie, Alberta, which will process some 100 million cubic feet a day of sour gas from its Pipestone Montney gathering and processing complex.

Kineticor Resource Corp. will purchase the onsite cogen plant for $85 million under the terms of a deal announced on March 25.

Whether the sale is the result of a competitive process as well as the identities of any financial advisers involved could not immediately be established. Spokespeople for Tidewater and Kineticor did not respond to inquiries by press time.

The cogen facility will supply the processing plant with generation and heat under a long-term energy services agreement. The tenor of the agreement was not disclosed.

The sour gas processing plant itself is fully contracted with firm commitments under take-or-pay deals with tenors of between five and 10 years with multiple offtakers.

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