Ovintiv Opens Pipestone Processing Plant Earlier Than Planned

Ovintiv Inc. OVV recently inaugurated thePipestone Processing Facility (PPF) at a reasonable budget more than five months in advance of the scheduled date. It is a natural gas processing and liquids stabilization plant that will enhance the company's high-return, condensate-rich Montney development.

With the introduction of this PPF,increased net processing capacity of around 170 million cubic feet per day of natural gas and 19,000 barrels of liquids per day, primarily condensate, is now available to Ovintiv. No new drilling was needed to accomplish new capacity arrangements while starting the facility.

Keyera Partnership, a subsidiary of Canadian midstream operator Keyera, owns the PPF.The facility allows Ovintiv to expand its existing volumes and optimize midstream fees by channeling production to gathering units having lower line pressures as well as the capacity to grow its Pipestone Montney resources.  

The PPF provides this Denver-based companywith processing under a "fee-for-service" midstream agreement. Ovintiv, formerly known as Encana Corp., used this model in other latest midstream expansions as well. These agreements offer added financial flexibility by lowering the company’s financial burden through revenue guarantee on a small portion of its initial capacity rights.

Company Profile

Ovintiv engages in exploration, development, production and marketing of natural gas, oil and natural gas liquids. The company holds principal assets in Anadarko Basin, located in the western and central parts of Oklahoma, the Permian Basin located in the western Texas and south eastern New Mexico, Midland Basin in Texas and the Montney Basin in western Canada.

Zacks Rank & Key Picks

Ovintiv currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space areLaredo Petroleum Inc. LPI, PDC Energy Inc. PDCE and Range Resources Corporation RRC, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here

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