News Release 30 December 1999

FOR IMMEDIATE RELEASE

EUB APPROVES NEW SOUR GAS PROCESSING PLANT AND RELATED FACILITIES NORTH OF DRAYTON VALLEY

Calgary, Alberta (30 December 1999) The Alberta Energy and Utilities Board (EUB) has approved an application by Northrock Resources Ltd. (Northrock) to construct and operate a new sour natural gas processing facility at 11-14-50-8 W5M in the Pembina field north of Drayton Valley (Decision 99-31). The EUB has also approved a number of other Northrock applications related to the sour gas plant. These include approvals to construct and operate various pipelines transporting products to and from the gas plant, approval to construct and operate two single sour gas well batteries at 6-14-50-8 W5M and 4-3-51-8 W5M, also in the Pembina field, and an approval for an acid gas disposal scheme.

The Board received objections to Northrock's Pembina project from area landowners in November 1998, prior to the subject applications being filed. Subsequently, Northrock filed its applications with outstanding interventions and the Board directed that a public hearing be held in Drayton Valley, Alberta, on 31 August and 1, 2, 3 September 1999. The Board considers the issues respecting the applications to be:

• the need for the facilities
• proposed plant location and alternative pipelines/processing options
• impacts of the proposed development
• consultation with the public and industry.

The Board accepts the need for Northrock to produce its reserves in the Pembina area, that additional sour gas processing is needed and that significant and costly modifications would be required to process Northrock's gas at other plants in the general area. The Board is satisfied that the proposal for sour gas sweetening and acid gas injection is superior to other alternatives for processing sour gas and that the design of the project results in regulatory requirements being fully met. The Board also believes that the impacts of the new plant are lower than the impacts of other alternative processing options in the region.

As to overall impacts, including emissions, noise and safety and emergency response preparedness, the Board believes that they can and will be mitigated. The Board concludes that none of the issues by themselves or in combination offer significant roadblocks to the project. The Board acknowledges interveners concerns with regard to facilities proliferation in the region, and discusses proliferation policy in Decision 99-31. The Board believes that adequate public consultation has taken place with regard to this project, and notes that while an Emergency Response Plan (ERP) is not required at this stage, further public consultation on the ERP must take place as the project proceeds.

In support of its application, Northrock made several commitments on the design and operation of its project. The Board believes some of these commitments should be linked to the approval as conditions. These are:

1. The plant will be shut in during outages of the acid gas injection system. Acid gas will not be continuously flared during injection system outages, other than volumes necessary to depressure and render equipment safe for repairs and maintenance.
2. The acid gas injection line will be installed in a closed utilidor that will be equipped with hydrogen sulphide (H₂S) detection every 30 metres. The automated response to H₂S detection in the utilidor will be configured to shut down the gas plant and to isolate and depressure the acid gas injection line.
3. All potentially odourous vents at the gas plant site will be connected to the flare system.
4. A meter will be installed on the acid gas flare line.
5. Sour fluids will be transported in pressurized trucks to prevent odours.
6. The gas plant facilities will meet a maximum night time sound level of 38 decibels (dBA). A post-construction comprehensive noise survey will be conducted at the two closest residences to verify compliance with the 38dBA night time sound limits.
7. During initial plant start-up, and until it is demonstrated to the satisfaction of the EUB Drayton Valley Field Centre staff that the plant can reliably and safely operate in a semi-attended mode, the plant will be staffed 24 hours per day. When the plant is unattended, Northrock operating staff will promptly respond to call-outs and emergency conditions consistent with its hearing commitments and its emergency response plan.

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This News Release, and the Decision are also available on the EUB Website at http://www.ercb.ca

For further information please contact:

Greg Gilbertson, Senior Advisor
EUB Communications
Tel: (403) 297-3648
E-mail: greg.gilbertson@eub.gov.ab.ca

NR 99-29