Keyera Announces $50 Million Investment in Diluent Distribution Terminal in Edmonton/Fort Saskatchewan Energy Hub



    CALGARY, March 12 /CNW/ - Keyera Facilities Income Fund (TSX:KEY.UN;
KEY.DB) ("Keyera") announced today that a subsidiary has agreed to acquire a
distribution terminal in the Edmonton/Fort Saskatchewan energy hub for
$32 million as part of a $50 million growth initiative. The facility, to be
known as the Alberta Diluent Terminal ("ADT"), will be used primarily to
handle condensate, for use as diluent in the oil sands sector. The transaction
is subject to normal commercial conditions and is expected to close no later
than mid April.
    The ADT will increase Keyera's condensate import capacity in the
Edmonton/Fort Saskatchewan hub by a factor of five, to over 60,000 barrels per
day, and will enable Keyera to continue as a key diluent supplier in Alberta
as bitumen production grows. With its existing rail and storage capabilities,
the site can become operational, on a limited basis, almost immediately. This
provides significant cost and time advantages relative to a greenfield
development.
    The ADT consists of a 42 acre parcel of land located just north of
Keyera's Edmonton Terminal. Located on the site is a rail offloading/loading
rack with 20 spots, providing the capacity to handle 80 rail cars per day,
rail storage spurs able to handle 200 rail cars, access to the Canadian
National and Canadian Pacific railways, a truck loading rack and
435,000 barrels of product storage in six above-ground steel storage tanks.
    Keyera also announced plans to invest $18 million to fully integrate the
facility with Keyera's NGL Infrastructure. Keyera intends to construct two
4-kilometre pipelines from the ADT facility to its Fort Saskatchewan pipeline
system, connecting its Edmonton terminal and its Fort Saskatchewan
fractionation and storage facility. When the pipeline connections are
complete, Keyera will be able to deliver product to market on a number of
pipelines, or to Keyera's storage facility in Fort Saskatchewan. The ADT will
also significantly enhance the operational flexibility of Keyera's existing
logistics and storage businesses in the area, allowing products to be received
in much higher quantities using 100 rail-car unit trains and providing product
delivery into receipt pipelines at significantly higher flow rates.
    "This acquisition is the latest step in our strategy of significantly
enhancing our capability as a service provider to the oil sands sector in
Alberta and is consistent with our goal of investing an average of $80 to
$100 million in growth opportunities over the next three to five years," said
Jim Bertram, President and CEO of Keyera. "The ADT facility is an ideal fit
with our existing infrastructure and provides the capacity necessary to meet
the growing needs of bitumen producers. Longer term, we expect the ADT
facility to provide additional growth capital opportunities to handle other
hydrocarbons and refined products from facilities in the area."
    Cash flows from this project will primarily be fee-for-service income
within Keyera's NGL Infrastructure contribution, and will also enable growth
in Marketing contribution. The facility is expected to be cash flow neutral in
2008 and provide meaningful cash flow accretion in 2009 and beyond.

    About Keyera Facilities Income Fund

    Keyera Facilities Income Fund (TSX:KEY.UN; KEY.DB) 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) and crude
oil midstream activities.
    Keyera's gas processing plants and associated facilities are
strategically located in the west central and foothills natural gas production
areas of the Western Canadian Sedimentary Basin. Its NGL and crude oil
infrastructure includes pipelines, terminals and processing and storage
facilities in Edmonton and Fort Saskatchewan, Alberta, a major North American
NGL hub. Keyera markets propane, butane and condensate to customers in Canada
and the United States.

    Advisory

    This document contains forward-looking statements that involve known and
unknown risks and uncertainties, many of which are beyond Keyera's control.
The forward-looking statements are based on management's current expectations
and assumptions relating to Keyera's business and the environment in which it
operates. As the results or events predicted or implied in these
forward-looking statements depend upon future events, actual results or events
may differ materially from those predicted. Some of the factors which could
cause actual results or events to differ materially include the ability of
Keyera to successfully implement strategic initiatives, whether such
initiatives yield the expected benefits, operating, construction and other
costs, the pace and location of oil sands developments, the effect of changes
in environmental and regulatory rules and standards, fluctuations in the
demand for diluent, bitumen and crude oil, the activities of producers,
competitors and others, the weather, overall economic conditions 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.
    For additional information on these and other factors which could cause
actual results or events to differ materially from the forward-looking
information contained herein, see Keyera's public filings on www.sedar.com.
Unless otherwise required by applicable laws, Keyera does not intend to
publicly update or revise forward-looking statements, whether as a result of
new information, future events or otherwise.

    %SEDAR: 00019203E




For further information:

For further information: about Keyera Facilities Income Fund, please
visit our website at www.keyera.com or contact: John Cobb, Director, Investor
Relations or Bradley White, Investor Relations Advisor, E-mail: ir@keyera.com,
Telephone: (403) 205-7670, Toll Free: 1-888-699-4853, Facsimile: (403)
205-8440


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