CALGARY, Nov. 10 /CNW/ - Keyera Facilities Income Fund (TSX:KEY.UN; KEY.DB; KEY.DB.A) ("Keyera") announced today it has entered into a letter of intent to purchase the remaining ownership interests in the Simonette gas plant and related gas gathering assets. By purchasing 62.5% of the Simonette gas plant, 66.7% of the North Cabin pipeline and 50% of the Solomon and Cabin Creek pipeline and compressor station, Keyera will own 100% of these facilities when this transaction is complete. As part of this transaction, Keyera will also acquire 100% of the 37 kilometre Findley pipeline and an average ownership interest of 30.4% in the 72 kilometre Lynx pipeline. The ownership interest in the Lynx pipeline is subject to rights of first refusal. Total cost is approximately $82 million. The transaction is expected to close prior to year-end and is subject to normal closing conditions, including execution of a formal purchase and sale agreement.
In a previously announced transaction, on October 29, 2010, Keyera invested $47.5 million to acquire a 37.5% ownership interest in the Simonette gas plant, as well as interests in a compression facility and the North Cabin and Solomon and Cabin Creek gathering pipelines that deliver gas to the plant for processing.
The Simonette gas plant, located approximately 120 kilometres northwest of the town of Edson, has a licensed capacity of 150 million cubic feet per day and is currently 38% utilized. In addition to unutilized sweet and sour processing capacity, the plant has natural gas liquids extraction capability. Keyera is the operator of Simonette gas plant.
"This acquisition is a tremendous fit with our strategy of expanding our gathering and processing presence in attractive geological regions of Alberta," said Jim Bertram, President and CEO of Keyera. "The lands within the capture area of the Simonette plant are geologically attractive, and producers have been using horizontal drilling and multi-stage completion technologies to target gas in the area. Ownership of 100% of the plant and key gathering pipelines provides us with significant operational flexibility and the ability to act quickly to meet our customers' needs."
About Keyera Facilities Income Fund
Keyera Facilities Income Fund (TSX:KEY.UN; KEY.DB; 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 the west central and foothills natural gas production areas of the Western Canadian 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.
Disclaimer
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 or waiver of all conditions to closing of the acquisitions, including obtaining all necessary governmental approvals; decisions by other owners to exercise rights of first refusal; closing of the transactions occurring on time and without amendment; future operating results of the assets; future operating results of Keyera's business segments and the components of those results; Keyera's ability to execute its strategic initiatives; 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. As Keyera does not yet own the assets to be acquired, all information regarding such assets contained herein has been derived by necessity from information provided by the vendors and other third parties.
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.
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For further information: about Keyera Facilities Income Fund, please visit our website at www.keyera.com or contact: John Cobb, Director, Investor Relations or Bradley White, Investor Relations Advisor, E-mail: ir@keyera.com, Telephone: (403) 205-7670, Toll Free: (888) 699-4853, Facsimile: (403) 205-8440
