CALGARY, May 31, 2017 /CNW/ - Keyera Corp. (TSX:KEY) ("Keyera") today announced the sanctioning of the first phase of its natural gas gathering and processing complex in the Wapiti area south of Grand Prairie, Alberta (the "Project"). The sanctioned portion of the Project is supported by agreements with its primary customer, which include an area dedication and take-or-pay commitments under a long-term gas handling agreement.
The first phase of the Project includes a 150 million cubic feet per day sour gas processing plant with acid gas injection capabilities and 25,000 barrels per day of condensate processing facilities, as well as a gathering pipeline system and field compressor stations. Based on the proposed construction schedule, operations are targeted to start up in mid-2019. Phase one is estimated at $470 million as it includes the build-out of certain infrastructure sufficient to support both phases. As a result of this decision, Keyera now expects to invest growth capital of between $800 million and $900 million in 2017.
Keyera is actively negotiating with several other producers in the area to nominate additional volumes and permit sanctioning of the second phase of the Project. Phase two would add an additional 150 million cubic feet per day of sour gas processing capacity and extend the gathering system at an incremental cost of approximately $155 million. The total cost of the two-phased Project is expected to be approximately $625 million. Additional third parties may require incremental gathering systems to be built.
"Keyera is very pleased to have reached an agreement with its primary customer to begin constructing phase one of this Project in the liquids-rich Montney," said Bradley Lock, Keyera's Senior Vice President of Gathering and Processing. "This Project, along with our Wapiti pipeline and Simonette gas plant, increases our presence in one of the most exciting developments in the Western Canada Sedimentary Basin. We look forward to working with area producers and stakeholders to develop this infrastructure in an environmentally and financially responsible manner."
Keyera Corp. (TSX:KEY) operates one of the largest midstream energy companies in Canada, providing essential services to oil and gas producers in the Western Canada Sedimentary Basin. Its predominantly fee-for-service based business consists of natural gas gathering and processing, natural gas liquids processing, transportation, storage, marketing, iso-octane production and sales, and an industry-leading condensate system in the Edmonton/Fort Saskatchewan area of Alberta. Keyera strives to provide high quality, value-added services to its customers across North America and is committed to conducting its business ethically, safely and in an environmentally and financially responsible manner.
This news release contains forward-looking statements based on Keyera's current expectations and assumptions made by the management of Keyera relating to its business, the environment in which it operates, its future operations and the performance of its assets, including the proposed Project. As these forward-looking statements depend upon future events, actual outcomes may differ materially depending on factors such as: the accuracy of the construction schedule and cost estimates; producer interest in the services being offered; future operating results of the assets; the ability of Keyera to execute its strategic initiatives in connection with the Project; availability and cost of engineering resources, construction crews and materials; timely receipt of all necessary regulatory approvals or changes in requirements; changes in production decline rates; 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 gas plant operation and oil and gas production; environmental liabilities; potential delays or changes in producer development plans in the area; 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.
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. Readers are cautioned that they should not unduly rely on forward-looking information.
SOURCE Keyera Corp.
For further information: about Keyera, please visit our website at www.keyera.com or contact: Keyera Corp., Lavonne Zdunich, Director, Investor Relations; or Nick Kuzyk, Manager, Investor Relations, Email: [email protected]; Telephone: 403.205.7670 / Toll Free: 888.699.4853