Keyera Announces Construction of Gathering Pipeline to Simonette and Plant Modifications to Increase Capacity
CALGARY, April 8, 2013 /CNW/ - Keyera Corp. (TSX:KEY) (TSX:KEY.DB.A) ("Keyera") announced two initiatives today to extend the capture area and to provide customers with enhanced processing capability at its Simonette gas plant ("Simonette"). The first initiative is the construction of a sour gas gathering pipeline, which will be called the Wapiti pipeline, from the Wapiti region of northwest Alberta to Simonette. The second initiative involves modifications to Simonette to increase plant capacity and handle the growing quantities of NGLs and condensate being produced in the area. The capital cost of these initiatives is expected to be approximately $210 million.
The Wapiti pipeline is underpinned by a long-term, fee-for-service natural gas gathering and processing agreement with NuVista Energy Ltd. ("NuVista"). In addition, NuVista has entered into a separate long-term agreement with Keyera to secure NGL fractionation and marketing services for its NGLs extracted at the plant.
The Wapiti pipeline consists of a 90-kilometre, 12-inch sour gas gathering pipeline and new inlet facilities at the plant. The total cost is estimated at $120 million. Construction is scheduled to begin in the fall of 2013 and the pipeline is expected to be in service in the second quarter of 2014, assuming receipt of regulatory approvals and delivery of long lead items on a timely basis. The Wapiti area is undergoing active drilling as producers continue to target the liquids-rich gas in the Montney geological zone. Keyera is in discussions with other producers along the pipeline route regarding the remaining unutilized capacity of the pipeline. Should there be sufficient interest, Keyera would also consider the construction of a separate 6-inch, 90-kilometre pipeline to carry segregated condensate along the same route.
In order to handle the growing demand for natural gas processing, Keyera will also be undertaking modifications at the plant to expand capacity and increase condensate handling capability. These modifications include the addition of refrigeration to increase the raw gas handling capacity and the construction of condensate stabilization facilities to handle growing volumes of condensate. These facilities will enable Simonette to handle an additional 100 million cubic feet per day of raw natural gas and 5,000 barrels per day of condensate. The total cost of these modifications is anticipated to be approximately $90 million. Work is expected to be complete in the second half of 2014.
"We are excited about this opportunity to extend the capture area and expand the capabilities of our Simonette gas plant to meet the needs of our customers," says David Smith, President and Chief Operating Officer of Keyera. "These initiatives will provide cost-effective enhancements to our gathering, processing and liquids extraction services, to support continued development of the Montney zone in the area."
About Keyera Corp.
Keyera Corp. (TSX:KEY) (TSX:KEY.DB.A) operates one of the largest natural gas midstream businesses in Canada. Its business consists of natural gas gathering and processing as well as the processing, transportation, storage and marketing of Natural Gas Liquids (NGLs), the production of iso-octane and crude oil midstream activities.
Keyera's gas processing plants and associated facilities are strategically located in the west central, foothills and deep basin natural gas production areas of the Western Canada Sedimentary Basin. Its NGL and crude oil infrastructure, including pipelines, terminals and processing and storage facilities, as well as its iso-octane facility, are located in Edmonton and Fort Saskatchewan, Alberta, a major North American NGL hub. Keyera markets propane, butane, condensate and iso-octane to customers in Canada and the United States.
This document contains forward-looking statements based on management's current expectations and assumptions relating to the Wapiti pipeline and proposed related facilities, the plant modifications, Keyera's business, the environment in which it operates and the future operations and performance of the assets. As these forward-looking statements depend upon future events, actual outcomes may differ materially depending on factors such as: Keyera's ability to obtain all necessary approvals and consents for the installation of the Wapiti pipeline, associated inlet facilities, the plant modifications and all associated facilities; securing the right-of-way for the Wapiti pipeline; fulfilment of the terms and conditions of both the gathering and processing agreement and the marketing agreement entered into in support of the Wapiti pipeline project; construction and input costs; construction scheduling variables; availability of construction and engineering resources; future operating results of the assets; Keyera's ability to execute its strategic initiatives; weather conditions; commodity supply/demand balances and prices; activities of producers, competitors, customers, business partners and others; demand for the services to be offered through each of the proposed projects; overall economic conditions; access to capital and financing alternatives; operational risks associated with natural gas processing and NGL extraction; regulatory approvals for future plant expansion opportunities; potential delays or changes in plans with respect to development projects or capital expenditures or the results therefrom; the legislative, regulatory and tax environment; and other known or unknown factors. There can be no assurance that the results or developments anticipated by Keyera will be realized or that they will have the expected consequences for or effects on Keyera.
SOURCE: Keyera Corp.For further information:
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