CALGARY, Dec. 12, 2014 /CNW/ - Keyera Corp. (TSX:KEY) ("Keyera") announced today that it has reached an agreement to acquire a 70.79% ownership interest in the Ricinus deep-cut gas plant in west central Alberta (the "Ricinus Plant") for $65 million. The acquisition is subject to closing conditions including but not limited to the waiver or expiration of rights of first refusal held by the other owners of the Ricinus Plant.
The Ricinus Plant, which is located 22 kilometres south of Keyera's fully-utilized Strachan deep-cut gas plant (the "Strachan Plant"), is a sweet gas processing plant with the ability to extract a C3+ mix of natural gas liquids ("NGL"). The current operating capacity of the Ricinus Plant is approximately 124 million cubic feet per day, compared to a licensed capacity of 221 million cubic feet per day. The lower operating capacity is due to only one of the two NGL processing trains currently being in operation. A turnaround of the Ricinus Plant was completed in September 2014.
Assuming the acquisition closes as anticipated, Keyera expects to become the operator of the Ricinus Plant. Keyera's future plans include increasing utilization and potentially reactivating the second NGL processing train to enable the Ricinus Plant to operate closer to its licensed capacity. To better serve producers within the capture areas of both facilities, Keyera plans to construct a new pipeline between the Ricinus Plant and the Strachan Plant and further invest in the associated gas gathering systems.
"Keyera is pleased to have the opportunity to acquire a majority working interest in the Ricinus Plant," said David Smith, Keyera's President and Chief Operating Officer. "Connecting this facility to our Strachan area infrastructure will not only allow us to make currently under-utilized processing capacity available to producers facing infrastructure constraints, it will also enable us to continue adding value to our integrated network of gas plants in west central Alberta."
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.
This document contains forward-looking statements based on Keyera's current expectations and assumptions relating to its business, the environment in which it operates, its future operations and the performance of its assets, including the Ricinus Plant. As these forward-looking statements depend upon future events, actual outcomes may differ materially depending on factors such as: the exercise or waiver of rights of first refusal; the other owners in the Ricinus Plant voting in favour of appointing Keyera as operator and in favour of Keyera's proposed future plans for the Ricinus Plant; certain amendments to the Construction, Ownership and Operation Agreement for the Ricinus Plant being approved by the owners of the Ricinus Plant; the condition of the second NGL processing train, including the work required to reactivate the second NGL processing train, scheduling of such work and the costs associated therewith; receipt of regulatory approvals to construct the pipeline connection between the Strachan Plant and the Ricinus Plant; variable related to construction costs and schedule associated with pipeline construction; producer interest in the services being offered; future operating results of the assets; the ability of Keyera to execute each of its strategic initiatives in connection with the Ricinus Plant and/or the Strachan Plant; risks arising from co-ownership of the Ricinus Plant; availability and cost of construction crews and materials; 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. 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: Please visit Keyera's 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