CALGARY, June 19, 2012 /CNW/ - Keyera Corp. ("Keyera") (TSX:KEY) (TSX:KEY.DB.A) announced today that it will be proceeding with construction of the Keyera South Cheecham Rail and Truck Terminal (the "Terminal"), located approximately 75 kilometres southeast of Fort McMurray. The Terminal will be a multi-purpose hydrocarbon rail and truck terminal, designed to support bitumen producers within the Athabasca oil sands area.
Keyera previously announced that it was exploring the development of a terminal in the South Cheecham area subject to sufficient customer interest in the project. Today, Keyera entered into a minimum four-year fee-for-service agreement with Statoil Canada Ltd. ("Statoil") which is sufficient to underpin the construction of the first phase of the Terminal. The agreement with Statoil includes provision for Keyera to provide diluent, dilbit and solvent terminalling services through the Terminal. In addition to the Terminal, Keyera will construct and operate pipeline connections between the Terminal and Statoil and partner PTTEP's Cheecham Terminal, approximately 12 kilometres north. Keyera will begin receiving revenue under the Statoil agreement upon start-up of the Terminal in 2013.
"This investment at the Keyera South Cheecham Terminal will strengthen our position in this region and enhance our ability to provide services to oil sands producers such as Statoil," said Jim Bertram, Chief Executive Officer of Keyera. "We are delighted to partner with a global energy company such as Statoil and provide services that will support its world-class oil sands projects. The Terminal represents the next step in the development of our oil sands services growth strategy as we continue to deliver on our commitment to provide various cost effective services to oil sands producers."
Keyera currently plans to develop the Terminal in phases as demand for terminalling services evolves. In addition to the facilities for handling diluent and dilbit at the Terminal, the initial phase will include a dilbit pipeline connection to Enbridge's Cheecham terminal. Engineering and site preparation for the first phase of development are already underway. Completion of the first phase is expected in the first half of 2013 at an estimated gross total cost of approximately $90 million. Delivery of equipment and construction delays are the key variables in achieving the on-stream date. Under the terms of a Memorandum of Understanding with Enbridge Inc., Enbridge may elect to participate in the Terminal as a 50% joint venture partner.
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 Keyera's business, the environment in which it operates, anticipated timing and closing of the acquisitions 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: satisfaction of all conditions in the agreement with Statoil; obtaining all necessary governmental approvals for the Terminal and the associated facilities; future operating results of the assets; Keyera's ability to execute its strategic initiatives; construction and input costs; weather conditions; construction scheduling variables; Enbridge Inc.'s decision on whether to participate as a joint venture partner; 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 in developing and producing natural gas; 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 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, see Keyera's public filings on www.sedar.com. The information provided in this release is given as of the date hereof.
For further information:
about Keyera, please visit our website at www.keyera.com or contact:
Director, Investor Relations
Email: [email protected]
Telephone: (403) 205-7670 / Toll Free: (888) 699-4853
Facsimile: (403) 205-8425.