Painted Pony Petroleum Ltd. said Jan. 13 the construction of the gas processing facility in the Townsend area by AltaGas Ltd. is progressing well ahead of schedule.

The Townsend Facility, located in northeast British Columbia, is now about 70% complete. AltaGas and Painted Pony expect to commission the facility earlier than initially scheduled.

In its first phase, AltaGas will construct and operate a 198 million cubic feet per day (MMcf/d) shallow-cut gas processing facility in the Montney resource play. Painted Pony will maintain the right to a minimum 150 MMcf/d of firm capacity.

The Townsend Facility is estimated to cost about C$325- to $350 million, to be constructed and funded by AltaGas.

The facility will be located about 100 km (62 miles) north of Fort St. John and 20 km (12 miles) southeast of AltaGas' Blair Creek facility, through which Painted Pony has already been processing a significant portion of its Montney production.

Painted Pony also has signed an agreement with TransCanada Corp. (NYSE: TRP) to participate in the Towerbirch Expansion Project that will provide the company with 130 MMcf/d of firm transportation service.

When combined with Painted Pony's firm transportation service to Sunset Creek, the expansion will provide direct physical access into the AECO system which will greatly diversify Painted Pony's sales point options, the release said.

The Towerbirch Expansion Project could be completed as early as November 2017. The 130 MMcf/d of firm transportation service will represent about 45% of Painted Pony's estimated natural gas sales volume at that time.

Painted Pony is actively drilling three wells and plans to drill a total of 29 (net) wells in 2016 driving daily production volumes to more than 240 MMcfe/d, or 40,000 barrels of oil equivalent per day, by year-end.