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By Chantal Wagner

ABANDONED WELLS

City approves to borrow $80-million for well abandonment project

Oct 6, 2020 | 11:07 AM

MEDICINE HAT, AB – City council passed the second and third reading of borrowing $80-million dollars for a well abandonment and reclamation project.

Both readings received unanimous approval on Monday night.

The money will go towards financing the city’s plan to abandon just under 2,000 natural gas wells over the coming years.

The first reading of the plan was passed back in April to borrow from the Alberta Capital Finance Authority.

The total cost of the abandonment has been estimated at $125-million and the City had originally planned to cover the majority of the project through reserves.

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However, low-interest rates swayed the City to look at a loan that would keep more of that reserve money in their pocket.

The city will now only be paying $45-million for the project while paying off the loan over the next 10 years through interest and principal payments.