CALGARY, April 10, 2013 /CNW/ - Keyera Corp. (TSX:KEY) (TSX:KEY.DB.A)
("Keyera") and Plains Midstream Canada ULC, a wholly owned subsidiary
of Plains All American Pipeline, L.P. (NYSE:PAA) ("Plains"), announced
today they have entered into an arrangement to solicit interest in the
construction of a jointly-owned liquids pipeline system in northwest
Alberta. The proposed pipeline system, to be called the Western Reach
Pipeline System, is anticipated to run from the Gordondale area of
northwestern Alberta to Alberta's natural gas liquids ("NGL") energy
hub in Fort Saskatchewan. Keyera and Plains have begun an open season
process seeking non-binding nominations for volumes to underpin
construction.
Keyera and Plains anticipate that the Western Reach Pipeline will
consist of two new-build pipelines, with one dedicated to a mixture of
propane, butane and condensate ("NGL mix") and the other intended for
segregated condensate service. The Western Reach Pipeline, expected to
be approximately 570 kilometres in length, will travel through the Deep
Basin area of Alberta, which contains some of the most prospective
liquids-rich geological horizons being developed in western Canada
today, including the Montney and Duvernay zones.
Keyera and Plains believe that separate dedicated pipelines for NGL mix
and segregated condensate will benefit customers, avoiding the costs
associated with pipelines operating in batch mode. Customers on the
Western Reach Pipeline will have the option to direct their NGL mix and
segregated condensate to a variety of fractionation, storage, pipeline
and terminal facilities at the Fort Saskatchewan energy hub.
The Edmonton/Fort Saskatchewan area is where the majority of Canada's
NGLs are aggregated for fractionation and subsequent delivery to
end-use customers. Both Keyera and Plains have significant NGL
fractionation, storage, pipeline and terminal facilities in the
Edmonton/Fort Saskatchewan area. These facilities enable customers to
access high-value markets for their propane, butane and condensate
production. Keyera operates the Fort Saskatchewan Condensate System,
consisting of extensive, interconnected condensate pipeline,
terminalling and storage facilities that provide customers with access,
storage and end-market delivery options. Plains operates an extensive
network of pipelines with connectivity to ship NGLs to Plains' eastern
infrastructure assets, which include the Sarnia fractionation and
storage facility, the Windsor and St. Clair storage facilities, and the
Eastern Delivery Systems. Keyera and Plains are both evaluating
expansions of their respective NGL fractionation facilities in Fort
Saskatchewan to provide additional fractionation capacity for the
growing volumes of NGLs produced in western Canada.
During the first stage of the open season, interested parties are
required to complete and execute a confidentiality agreement and
non-binding indicative nomination form. Deadline for submitting the
documents is May 15, 2013. Additional details can be found on either
the Keyera or the Plains website at www.keyera.com or www.plainsmidstream.com.
Keyera and Plains will each have a 50% ownership interest in the Western
Reach Pipeline. Plains will be responsible for constructing and
operating the system. Based on current plans, it is anticipated that
the Western Reach Pipeline could be operational by late 2015, assuming
timely completion of the open season and regulatory processes. The
capital cost will be determined once volumes have been confirmed and
the engineering design has been completed.
About Keyera and Plains
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 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.
Plains Midstream Canada provides value-added transportation, gathering, marketing, processing,
fractionation, storage and terminalling services to customers by
combining strategically located assets with extensive marketing and
distribution expertise.
Plains' crude oil assets are located in the key producing regions of
Canada. With approximately 5,000 kilometres of active gathering and
mainline pipeline systems, 4.5 million barrels of total storage
capacity, and 26 truck terminals, Plains' existing infrastructure
provides flexibility in meeting customers' needs. The operations of
their crude oil business are conducted throughout Alberta, Saskatchewan
and Manitoba, as well as in North Dakota and Montana.
Located throughout Canada and the United States, Plains' NGL and LPG
facilities include approximately 22 million barrels of useable storage
capacity, 23 storage facilities, 18 rail terminals, eight fractionation
facilities, six pipeline terminals, four straddle plants and two gas
processing plants. Plains' strategically located assets, combined with
strong marketing presence in the major LPG storage and trading centers,
allow them the flexibility to provide the energy product solutions that
their customers require.
Plains Midstream Canada, ULC is a wholly owned subsidiary of Plains All
American Pipeline, L.P., a publicly traded Partnership (NYSE:PAA) with
a market capitalization of over $18 billion.
Disclaimer
This document contains forward-looking statements based on Plains' and
Keyera's current expectations and assumptions relating to the Western
Reach Pipeline, their businesses, the environment in which they operate
and their future operations and performance of their assets. As these
forward-looking statements depend upon future events, actual outcomes
may differ materially depending on factors such as: negotiation of
definitive joint venture agreements between Keyera and Plains; producer
drilling plans and results in the region to be served; negotiation of
satisfactory agreements with producers or other potential shippers in
order to support construction and operation of the Western Reach
Pipeline; obtaining all necessary approvals and consents for the
Western Reach Pipeline and all associated facilities; securing
appropriate rights-of-way for the Western Reach Pipeline; producer
interest in the services being offered; construction and input costs;
construction scheduling variables; availability of construction crews
and engineering services; ability to source required parts and
equipment; future operating results of the assets; Keyera's and Plains'
ability to execute their strategic initiatives; 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 natural gas processing and NGL extraction;
regulatory approvals for future plant expansion opportunities; 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 or Plains will be realized or that they will have
the expected consequences for or effects on Keyera and Plains.
Additional Information
For additional information on these and other risk factors, see Keyera's
public filings on www.sedar.com and PAA's filings with the U.S. Securities and Exchange Commission. The
information provided in this release is given as of the date hereof.
SOURCE: Keyera Corp.
