CALGARY, Sept. 10, 2012 /CNW/ - Keyera Corp. (TSX:KEY) (TSX:KEY.DB.A) ("Keyera") announced today its plan to construct a 30,000 barrel per day de-ethanizer at its NGL fractionation and storage facility in Fort Saskatchewan, Alberta. The de-ethanizer will allow Keyera to process an ethane-rich stream of NGLs (referred to as C2+ mix) creating specification ethane for delivery to petrochemical producers in Alberta and a propane-rich stream of NGLs for delivery into Keyera's fractionation facilities. The estimated total gross cost for the project, including the receipt facilities, C2+ mix storage and pipeline interconnections, is approximately $110 million. Keyera is targeting completion for the first half of 2014.
Keyera has entered into a long-term, fee-for-service agreement with a large producer in the deep basin of west central Alberta, providing commercial support for the project. Under the terms of the agreement, the producer will furnish C2+ mix to Keyera for processing into specification products, including ethane, propane, butane and condensate. Keyera is currently in discussions with other producers interested in contracting for the remaining de-ethanization capacity.
"This project is another example of our ability to utilize existing facilities and operational expertise to capture new complementary business opportunities," said Jim Bertram, Chief Executive Officer of Keyera. "We work hard to provide timely, value added services to our customers. This project is a great example, where we are providing the benefit of incremental de-ethanization capacity for our customers along with the optionality to sell ethane to any buyer on the Alberta Ethane Gathering System ("AEGS"). This investment broadens Keyera's service offering to producers and allows Keyera to better compete for an increasing supply of NGLs in western Canada."
Detailed engineering work is currently underway and certain long-lead items have already been ordered. In addition to the de-ethanizer tower and ancillary equipment, Keyera will dedicate an underground storage cavern to C2+ service, construct connections to C2+ receipt pipelines in the area and build an ethane delivery connection to AEGS.
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 conditions related to commercial arrangements in support of the project; securing required pipeline interconnections; obtaining all necessary governmental approvals for the de-ethanizer, pipeline connections and associated facilities; future operating results of the assets; Keyera's ability to execute its strategic initiatives; decisions and actions of the co-owners of Keyera's Fort Saskatchewan facility; 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; 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.
SOURCE: Keyera Corp.
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