CALGARY, March 31, 2015 /CNW/ - Keyera Corp. (TSX:KEY) ("Keyera") today announced a 50-50 joint venture with Kinder Morgan, Inc. (NYSE:KMI) ("Kinder Morgan") to build the Base Line Terminal (the "Terminal"), an above ground crude oil storage terminal near Edmonton, Alberta. The project is underpinned by several take-or-pay agreements ranging up to 10 years in length with creditworthy customers. Based on current capital estimates, Keyera's share of costs to construct the Terminal is estimated to be approximately CDN$330 million, excluding capitalized interest. The Terminal is expected to be commissioned in phases, with the first tanks scheduled to be commissioned in the second half of 2017, based on the most recent construction schedule.
The Terminal will be built on undeveloped land at Keyera's Alberta EnviroFuels site. Initially, 12 tanks will be constructed to provide customers with 4.8 million barrels of storage capacity. Sufficient land remains to add up to 1.8 million barrels of incremental storage capacity subject to future demand. The Terminal will be connected via pipeline to Kinder Morgan's existing Edmonton storage terminals and will provide customers with access to all crude oil streams handled by Kinder Morgan. From the Terminal, customers will be able to deliver products to end markets using multiple delivery options, including but not limited to major pipelines and nearby rail terminals operated by Keyera and Kinder Morgan. Kinder Morgan will oversee construction of the project and operate the Terminal once it is in service.
"This project is another example of Keyera and Kinder Morgan combining complementary assets and expertise to meet our customers' needs," said David Smith, Keyera's President and Chief Executive Officer. "While Keyera is contributing valuable undeveloped land, Kinder Morgan provides unparalleled connectivity to sources of crude oil in the Edmonton area."
"Kinder Morgan is excited to build this new facility with Keyera, which was made possible by leveraging the success of our previous joint venture," said John Schlosser, Kinder Morgan Terminals President. "Edmonton is playing an increasingly important role as a North American crude oil hub, demonstrated by the growth of inbound and outbound pipeline capacity. As such, it needs additional crude storage capacity, and our customers' commitments affirm that growing need. We have the ability to further expand the facility to provide future customers with storage services in this important market."
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 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.
About Kinder Morgan
Kinder Morgan, Inc. (NYSE:KMI) is the largest energy infrastructure company in North America. It owns an interest in or operates approximately 84,000 miles of pipelines and 180 terminals. The company's pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials like coal and petroleum coke. Kinder Morgan is the largest midstream and third largest energy company in North America with an enterprise value of approximately $130 billion.
This document contains forward-looking statements based on current expectations and assumptions made by the management of Keyera and Kinder Morgan respectively relating to, among other things, each party's business, the environment in which each 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: obtaining all necessary governmental approvals for the Base Line Terminal, proposed pipelines and the associated facilities; satisfaction of all conditions in customer contracts; future operating results of the assets; ability to execute strategic initiatives; construction and input costs; weather conditions; construction scheduling variables; 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; and 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 either Keyera or Kinder Morgan will be realized or that they will have the expected consequences for or effects on Keyera.
For additional information on these and other factors, 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.
SOURCE Keyera Corp.
For further information: about Keyera, please visit our website at www.keyera.com or contact: Keyera Corp., John Cobb, Vice-President, Investor Relations, or Lavonne Zdunich, Director, Investor Relations, or Nick Kuzyk, Manager, Investor Relations, Email: [email protected], Telephone: 403.205.7670 / Toll Free: 888.699.4853