Keyera to Participate as Non-Operating Owner in Norlite Pipeline
CALGARY, May 20, 2014 /CNW/ - Keyera Corp. (TSX:KEY) ("Keyera") announced today that it has reached agreement with Enbridge Pipelines (Athabasca) Inc. ("Enbridge") to participate in the Norlite Pipeline as a 30% non-operating owner.
The Norlite Pipeline will transport diluent for producers from the Edmonton/Fort Saskatchewan area into the Athabasca oil sands region. The pipeline will initially be constructed from Enbridge's Stonefell Terminal near Fort Saskatchewan northward to Suncor's East Tank Farm, which is adjacent to Enbridge's Athabasca Terminal. Along the route, Norlite will pass by both Enbridge's Cheecham Terminal and the Keyera/Enbridge South Cheecham Rail and Truck Terminal.
Based on the current scope, the Norlite Pipeline will consist of a 20-inch diameter pipeline with an ultimate capacity of 280,000 barrels per day. It will be anchored by throughput commitments from Suncor Energy Inc. ("SEI"), Total E&P Canada Limited ("Total") and Teck Resources Limited ("Teck") for the Fort Hills oil sands project and by Suncor Energy Oil Sands Limited Partnership ("SEOSLP") for its proprietary oil sands production. If Enbridge is successful in securing additional long term commitments, the scope of the project could be increased to a 24-inch diameter pipeline system, and could also include a potential lateral pipeline to Enbridge's Norealis Terminal. Enbridge anticipates finalizing the project scope later this year, at which time the estimated capital cost will be determined. The projected in-service date is the second quarter of 2017.
The throughput commitments SEI, Total, Teck and SEOSLP have made on the Norlite Pipeline include transportation on Keyera's diluent system between Edmonton and Stonefell. Keyera's diluent transportation system will deliver into the Norlite Pipeline and provide Norlite shippers with supply flexibility and liquidity while generating incremental revenue for Keyera.
"We are pleased to be partnering once again with Enbridge to provide necessary services to the oil sands sector," said David Smith, President and Chief Operating Officer of Keyera. "The Norlite Pipeline enhances Keyera's integrated service offering, enables us to participate in a long-haul pipeline transportation system and provides us with an opportunity to offer complementary diluent handling services such as storage and rail off loading."
About Keyera Corp.
Keyera Corp. (TSX:KEY) 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 Keyera's current expectations and assumptions relating to its business, the environment in which it operates, its future operations, the performance of its assets and the proposed Norlite Pipeline. As these forward-looking statements depend upon future events, actual outcomes may differ materially depending on factors such as: the design, construction and operation of the Norlite Pipeline; producer development plans and oilsands activity levels, including those of SEI, Total, Teck and SEOSLP; the ability of Enbridge to secure all necessary approvals and consents for the proposed Norlite Pipeline and all associated facilities; the ability of Enbridge to secure appropriate rights-of-way for the proposed Norlite pipeline system; producer interest in the services being offered and willingness to contract for services to support an increased scope; construction and input costs; construction scheduling variables; availability of construction crews and engineering services; ability to source required parts and equipment; future operating results of the assets; the ability of Keyera and Enbridge to execute each of their strategic initiatives in relation to this project and associated services; interest of producers, including SEI, Total, Teck and SEOSLP, in contracting for additional Keyera services; weather conditions; commodity supply/demand balances and prices; activities of producers, competitors, customers, business partners and others; overall economic conditions; access to capital and financing alternatives; operational risks associated with pipeline operations and oilsands activities; and potential delays or changes in plans with respect to the project 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 it will have the expected consequences for or effects on Keyera.
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