SemCAMS is the largest licensed processor of sour gas in Alberta, according to the company. Its status as solely a processor means it can give producers its full attention and resources.

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SemCAMS serves as an important link in the infrastructure of western Canada’s gas pipelines. President Darren Marine says the cornerstone of SemCAMS’s success lies in its customer-focused culture and its individualized approach to pro-cessing gas. SemCAMS gives its customers cost-effective and reliable solutions by maintaining a high level of service and accountability, he says.

The competitive nature of the natural gas industry and the number of existing producers has allowed SemCAMS to step forward as the midstream company of choice. “The benefit of not being a producer allows us to build long-term service partnerships with companies who rely on our experience and expertise,” Marine says. “Our customers are looking for a company whose focus is processing and gathering, not producing.”

With four gas processing plants and more than 600 miles of natural gas gathering pipeline in Alberta, SemCAMS is the largest licensed processor of sour gas in the province. The company’s four processing plants boast a combined licensed capacity of 1.5 billion cubic feet of gas per day. Three of those plants are based in west-central Alberta and specialize in processing sour gas. The fourth plant, in Alberta, processes sweet natural gas.

Already a significant player in Alberta, Marine says SemCAMS is preparing to leap into areas where drilling has been booming but very little infrastructure exists yet. “We’ve got a very diverse set of gathering lines in west-central Alberta and we’re actively pursuing opportunities to increase our infrastructure,” Marine says.

The company recently announced an agreement with two major area producers that will allow SemCAMS to operate in British Columbia, which will be the farthest northwest the company has operated to date. “We are expanding into a new frontier. Until now, we have always been an Alberta processor,” Marine says.

SemCAMS is a privately held company, which Marine says gives it the opportunity to be more flexible than other midstream companies. He says the company can afford to be more creative in finding solutions for customers. “We’re willing to take some risk on in order to tie volumes into our system and provide our customers with a better return,” he says.

Although other midstream service providers may ask customers to pay for all of the engineering work involved, SemCAMS explores all options.

“We look at each opportunity on its own merit, and traditionally you’ll see that the midstreamers look for 100 percent take-or-pay in their contracts,” Marine explains. “If we like the opportunity and it fits within SemCAMS’s growth strategy, we’ll certainly look at something less than 100 percent backstop. In some cases, we’re willing to share risk and cost.”

SemCAMS can also provide customers with priority access to its facilities and services. “A lot of producers, they hold off a certain amount of space for their own drilling needs,” Marine says. “That’s something that we don’t have to worry about.  We treat all the producers the same. This approach gives us a lot of flexibility to meet our customers’ unique needs.”

Adding Manpower
Two of the biggest difficulties facing SemCAMS now are the same as those plaguing the entire industry: the growing scarcity of natural gas and a shortage of skilled labor. Marine says the company is taking active steps to shield it from these challenges.

In particular, he says, the labor shortage has required the company to think ahead and plan for the future sooner than expected. “It has affected everybody, and we’re combating that by putting more resources into targeting individuals who will be the future of SemCAMS,” Marine says. As the labor pool ages, companies like SemCAMS have chosen to take a proactive approach to finding the next generation of workers.

SemCAMS is approaching technical and vocational schools to search for promising laborers, and has offered to pay for some candidates’ schooling. Marine says allowing individuals to work for the company on a short-term basis has been fruitful, as some have returned to SemCAMS after graduation.

Finding the next generation of its work force has been a top priority for SemCAMS at every level of the organization.  Even though most of the focus is on field laborers, SemCAMS isn’t taking any chances with management, either. The company wants to make sure the experience represented by its front office is passed down to the future.

“The aging work force is a concern, so we’ve developed a multi-stage succession plan for our head office in Calgary, but more importantly for our field locations,” Marine says. “Succession planning is certainly more important now than ever.”

As for the level of natural gas reserves, “We’re constantly on a treadmill with the producers as their reserves decline,” Marine says. The company needs to continually replace reserves in its plants to keep its cost structure down.

“As we bring more gas into our plants, it increases our volume and decreases the unit costs,” Marine says. “It’s a process of keeping up with the declines.”

Additionally, commodity prices of natural gas have been depressed, creating a slowdown in producers’ drilling. “There’s not a lot we can do about prices, obviously,” Marine says.

Where SemCAMS can make a difference is in finding more sources of natural gas in which to establish infrastructure. Marine says the company has a few projects in development that will create new sources for the company and give it a greater presence. “We’re aggressively seeking opportunities to expand our pipeline infrastructure network out into new frontier areas,” he says.

New Connections
The company’s earliest efforts to move into new areas are represented by two projects: the Redwillow Pipeline and the Northern Pipeline System Expansion. Marine says both projects serve the company by bringing its infrastructure into British Columbia. “We’re going to be looking for every opportunity to acquire related resources in our catchment area,” he says.

The Northern Pipeline System Expansion is being developed by SemCAMS and a group of producers based in the Tumbler Ridge area of northeastern British Columbia. It will involve the construction of more than 26 miles of 12-inch pipeline, the expansion of an existing compressor station and the construction of a new compressor station. The pipeline being expanded is known as the Northwest Wapiti Pipeline.

SemCAMS has taken the necessary steps to ensure the environmental impact of this project is minimal. The company performed environmental fieldwork this summer by conducting vegetation, wildlife and fish surveys. The company works closely with Aboriginal communities living in the area. “SemCAMS has and will continue to ensure that Aboriginal monitors are actively engaged during all stages of the project,” the company says.

The proposed pipeline expansion will also be incorporated into SemCAMS’s operational systems to provide continuous monitoring of the pipeline and related facilities. SemCAMS’s Gas Control Centre is located in Edson, Alberta.

High Potential
The Redwillow Pipeline Project, first proposed in May, will connect northeastern British Columbia with the Northwest Wapiti Pipeline, as well as the Wapiti and Simonette Pipelines, also operated by SemCAMS. The project calls for the construction of approximately 93 miles of pipeline starting southwest of Tumbler Ridge, British Columbia. Once the project is completed, processing of gas collected  will take place at SemCAMS’s Kaybob South No. 3 Gas Plant.

The company says the Redwillow Project will take advantage of the abundant natural gas resources in the region. “The pipeline route between the Alberta-British Columbia border and Tumbler Ridge is an area of Canada with significant sour gas production potential,” Marine says. “According to information from the National Energy Board and the Ministry of Energy, Mines and Petroleum Resources, northeast British Columbia holds approximately 25 percent of the ultimate conventional natural gas resources in the Western Canadian Sedimentary Basin.”

SemCAMS has two options for making the most of that opportunity – one is to build a new sour gas processing facility, and the other is to utilize unused capacity at one of the company’s existing facilities. Marine says the second option has a clear advantage over the first, especially considering the volumes in those particular areas.

“A new gas processing facility is an expensive venture and likely not economical for the project volumes,” Marine says. “The existing sour transportation and processing infrastructure in the area does not currently have the capacity to handle the proposed third-party volumes.”

The Redwillow Pipeline Project would solve the infrastructure and processing gap in northeast British Columbia by building a new sour gas pipeline, following existing rights-of-way and using the sour gas processing capability at the SemCAMS-operated K3 Gas Plant in Alberta.

“The use of SemCAMS’s existing facility avoids any proliferation of sour gas processing facilities that would result from construction of new facilities,” the company says.

“The Redwillow Pipeline Project allows for direct access to eastern markets, is economical and is the shortest time-to-market option, which in turn maximizes the value of the northeast British Columbia resource,” Marine says.

The Redwillow Pipeline, once approved, is expected to be completed and ready for operation by the third quarter of 2009.

Good Reviews
Many producers who use SemCAMS for processing and gathering say they appreciate the company’s approach, and its reliability and independence make it the best option for their processing needs. Many of them say SemCAMS breaks the mold of processors by being easy to work with and fair. In addition, many say they’ve found working with SemCAMS to be a pleasant experience.

Dave Summers, COO of Alberta-based Fairborne Energy Trust, says SemCAMS’s consistency and lower prices are what make it a valued partner for his company. SemCAMS processes nearly 21 million cubic feet a day from Fairborne’s Wild River field in north-central Alberta.

Fairborne has been working with SemCAMS for three years, and Summers says the experience has been a good one. “They’re good operators,” he says.

Wally Buchan, engineering and operations manager for Escavar Energy, also located in Alberta, says that even though the company’s volume is much smaller than others, SemCAMS treats it with the same respect as larger customers.

“We’ve been running through SemCAMS pipelines since August of 2005,” Buchan notes, which is as long as Escavar has been in operation. The company relies on SemCAMS to process nearly 3 million cubic feet of gas a day.

“I’ve found SemCAMS to be very responsive and they definitely want to work with producers to ensure continuity of services,” Buchan says. “Unlike some, they’ve been very fair and easy to deal with.”

Bill Jackson is a joint venture manager with Apache Canada, which owns part of the Kaybob South Gas Plant.  He says the company provides Apache with processing services for unassociated and solution gas from the Kaybob area. He also praises SemCAMS for its attention to Apache Canada’s needs, along with its reaction time. “They’re good to work with, they’re very responsive to our needs,” Jackson says. “If we have other activities in the area that might require processing, they’re very quick to respond.”

Community Care
The origin of SemCAMS stems from the entry of BP and Chevron into the gas processing business in Alberta in 2000. The companies’ gathering and processing assets in the region were rolled into a single entity called Central Alberta Midstream. In 2005, Tulsa, Okla.-based SemGroup purchased Central Alberta Midstream and renamed it.

One of the most important things for SemCAMS is to give back to the community, Marine says. “Since our operations are largely in the Fox Creek and Whitecourt areas of Alberta, the majority of our charitable donation budget goes to these communities,” he says.  

The head office in Calgary recently donated a day’s work to Habitat For Humanity and regularly serves at the Calgary Drop-In and Rehabilitation Centre. Marine says the company also donates to Ronald McDonald House, Fox Creek Hospital and marked 100 percent employee participation with the Calgary and Area United Way Campaign for 2007. “We try to focus on major community issues such as homelessness, health and education,” Marine says.