CALGARY, Jan. 4, 2012 /CNW/ - Keyera Corp. (TSX:KEY) (TSX:KEY.DB.A) ("Keyera") announced today that it has entered into a Memorandum of Understanding ("MOU") with a subsidiary of Enbridge Inc. ("Enbridge") outlining terms for the creation of a joint venture (the "Joint Venture") to pursue a rail and truck terminal and a long haul diluent pipeline in the Athabasca oil sands area. The Joint Venture is soliciting interest from bitumen producers in the Athabasca region of Alberta interested in contracting for diluent transportation or terminalling services.
The rail and truck terminal, which will be called the South Cheecham Rail and Truck Terminal (the "Terminal"), will be located near the Enbridge Cheecham Terminal southeast of Fort McMurray, Alberta. The Terminal would consist of facilities to enable the receipt of diluent or solvents via railcar for delivery to oil sands sites, and railcar loading of diluted bitumen for delivery to refineries. Construction of the Terminal is anticipated to begin in the second half of 2012, assuming sufficient commitments are received, in order to provide a diluent delivery solution for producers prior to the diluent pipeline being constructed. In order to expedite construction of the Terminal, clearing of land has begun, with a target to be operational by mid-year 2013. Longer term, the Terminal may provide the Joint Venture with the opportunity to offer bitumen producers a number of other services.
The proposed diluent pipeline, to be called the Norlite Pipeline, would begin in the Stonefell area, just north of Fort Saskatchewan, and deliver diluent to Athabasca oil sands producers. The Norlite Pipeline is intended to connect with Keyera's Fort Saskatchewan Condensate System, providing shippers with access to Keyera's extensive diluent supply points, as well as its storage and transportation infrastructure in the Edmonton/Fort Saskatchewan area. If a decision to proceed is made in 2012, the Joint Venture estimates that the Norlite Pipeline could be operational in 2015.
Under the terms of the MOU, Enbridge and Keyera will have ownership interests of 70% and 30%, respectively, in the Norlite Pipeline and Enbridge will be the operator. Keyera and Enbridge will each have a 50% ownership interest in the Terminal and Keyera will be the operator.
"Enbridge is a proven leader in providing transportation solutions to the energy sector," said David Smith, President and COO of Keyera Corp. "And Keyera's storage and terminalling capabilities are very complementary. As bitumen production increases in northeastern Alberta, additional diluent transportation and terminalling services will be required. Working with Enbridge, we can provide bitumen producers with a full service package to meet their diluent logistics requirements."
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) and crude oil midstream activities.
Keyera's gas processing plants and associated facilities are strategically located in liquids-rich natural gas production areas of the Western Canada 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.
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 MOU with respect to proceeding with the Terminal and/or the Norlite Pipeline (including the negotiation and execution of applicable commercial agreements); receipt of sufficient producer commitments to support the projects; obtaining all necessary governmental approvals; future operating results of the assets; future operating results; the ability of Keyera and the Joint Venture to execute its strategic initiatives; construction and input costs; 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 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 is this release is given as of the date hereof.
For further information:
For further information about Keyera, please visit our website at www.keyera.com or contact:
John Cobb, Director, Investor Relations or
Heidi Christensen Brown, Senior Advisor, Investor Relations
E-mail: [email protected], Telephone: (403) 205-7670 / Toll Free: (888) 699-4853, Facsimile: (403) 205-8425.