CALGARY, April 8, 2013 /CNW/ - Keyera Corp. (TSX:KEY) (TSX:KEY.DB.A)
("Keyera") announced two initiatives today to extend the capture area
and to provide customers with enhanced processing capability at its
Simonette gas plant ("Simonette"). The first initiative is the
construction of a sour gas gathering pipeline, which will be called the
Wapiti pipeline, from the Wapiti region of northwest Alberta to
Simonette. The second initiative involves modifications to Simonette to
increase plant capacity and handle the growing quantities of NGLs and
condensate being produced in the area. The capital cost of these
initiatives is expected to be approximately $210 million.
The Wapiti pipeline is underpinned by a long-term, fee-for-service
natural gas gathering and processing agreement with NuVista Energy Ltd.
("NuVista"). In addition, NuVista has entered into a separate long-term
agreement with Keyera to secure NGL fractionation and marketing
services for its NGLs extracted at the plant.
The Wapiti pipeline consists of a 90-kilometre, 12-inch sour gas
gathering pipeline and new inlet facilities at the plant. The total
cost is estimated at $120 million. Construction is scheduled to begin
in the fall of 2013 and the pipeline is expected to be in service in
the second quarter of 2014, assuming receipt of regulatory approvals
and delivery of long lead items on a timely basis. The Wapiti area is
undergoing active drilling as producers continue to target the
liquids-rich gas in the Montney geological zone. Keyera is in
discussions with other producers along the pipeline route regarding the
remaining unutilized capacity of the pipeline. Should there be
sufficient interest, Keyera would also consider the construction of a
separate 6-inch, 90-kilometre pipeline to carry segregated condensate
along the same route.
In order to handle the growing demand for natural gas processing, Keyera
will also be undertaking modifications at the plant to expand capacity
and increase condensate handling capability. These modifications
include the addition of refrigeration to increase the raw gas handling
capacity and the construction of condensate stabilization facilities to
handle growing volumes of condensate. These facilities will enable
Simonette to handle an additional 100 million cubic feet per day of raw
natural gas and 5,000 barrels per day of condensate. The total cost of
these modifications is anticipated to be approximately $90 million.
Work is expected to be complete in the second half of 2014.
"We are excited about this opportunity to extend the capture area and
expand the capabilities of our Simonette gas plant to meet the needs of
our customers," says David Smith, President and Chief Operating Officer
of Keyera. "These initiatives will provide cost-effective enhancements
to our gathering, processing and liquids extraction services, to
support continued development of the Montney zone in the area."
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.
Disclaimer
This document contains forward-looking statements based on management's
current expectations and assumptions relating to the Wapiti pipeline
and proposed related facilities, the plant modifications, Keyera's
business, the environment in which it operates 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: Keyera's ability to obtain all
necessary approvals and consents for the installation of the Wapiti
pipeline, associated inlet facilities, the plant modifications and all
associated facilities; securing the right-of-way for the Wapiti
pipeline; fulfilment of the terms and conditions of both the gathering
and processing agreement and the marketing agreement entered into in
support of the Wapiti pipeline project; construction and input costs;
construction scheduling variables; availability of construction and
engineering resources; future operating results of the assets; Keyera's
ability to execute its strategic initiatives; weather conditions;
commodity supply/demand balances and prices; activities of producers,
competitors, customers, business partners and others; demand for the
services to be offered through each of the proposed projects; overall
economic conditions; access to capital and financing alternatives;
operational risks associated with natural gas processing and NGL
extraction; regulatory approvals for future plant expansion
opportunities; 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.
SOURCE: Keyera Corp.
