CALGARY, July 30, 2013 /CNW/ - Keyera Corp. (TSX:KEY) (TSX:KEY.DB.A)
("Keyera") and Kinder Morgan Energy Partners L.P. (NYSE:KMP) ("Kinder
Morgan") today announced a 50-50 joint venture to build a crude oil
rail loading facility in Edmonton, Alberta called the Alberta Crude
Terminal. When complete, the Alberta Crude Terminal will be able to
accept crude oil streams handled at Kinder Morgan's Edmonton Terminal
for loading and delivery via rail to refineries anywhere in North
America.
"We are delighted to partner with Kinder Morgan, one of the premier
pipeline transportation and energy storage companies in North America,"
said David Smith, President and COO of Keyera. "Kinder Morgan's access
to multiple crude streams, together with our location and facility
capabilities, combines crude oil supply with the necessary
infrastructure, land and rail connectivity to help address some of the
crude oil delivery constraints currently being experienced by the
Alberta energy sector."
"Keyera is a key and significant midstream company in Western Canada and
we are pleased to be able to join forces with them to enable additional
market export options for the Canadian producer and supply options for
the North American refining industry," said Bill Henderson, Vice
President for Kinder Morgan Canada Terminals. "The Alberta Crude
Terminal is a great strategic fit with our expanding Edmonton terminal
hub and is a very important part of our growing crude by rail terminal
network."
The Alberta Crude Terminal will be constructed next to Keyera's Alberta
Diluent Terminal on land recently acquired by a Keyera subsidiary. The
Alberta Crude Terminal, which will be operated by Keyera, will have 20
loading spots capable of loading approximately 40,000 barrels per day
of crude oil into tank cars and will be served by both Canadian
National Railway and Canadian Pacific Railway. The location is very
well situated to provide this service, as the Edmonton area is western
Canada's primary oil hub where Alberta crude oil is aggregated before
being delivered to markets across North America.
In addition to the construction of the Alberta Crude Terminal, Kinder
Morgan and Keyera are independently planning modifications to their
respective facilities in the Edmonton area to facilitate delivery of
crude oil to the Alberta Crude Terminal. Kinder Morgan is proposing to
construct a 16-inch pipeline to connect its North 40 Edmonton Terminal
to Keyera's Edmonton Terminal. Keyera plans to construct a new 16-inch
crude oil pipeline across its Edmonton Terminal to join to the existing
Alberta Diluent Terminal connector pipeline and install additional
pumping capacity. In conjunction with this project, Keyera is also
proposing to construct a new 12-inch condensate pipeline connecting the
Alberta Diluent Terminal to Keyera's Fort Saskatchewan Pipeline System.
Engineering work is well underway on these initiatives, and
commissioning of the new terminal is targeted for the second quarter of
2014, assuming receipt of regulatory approvals and delivery of
long-lead items on a timely basis. Keyera's share of the cost of the
Alberta Crude Terminal, as well as the land purchase, pipeline
construction and other facility modifications, is expected to be
approximately $65 million. Kinder Morgan's share of the cost of the
Alberta Crude Terminal including modifications to the Edmonton North 40
terminal and connections to Keyera is expected to be approximately $33
million. Construction of the Alberta Crude Terminal is underpinned by a
five-year agreement with a major refiner.
In anticipation of additional demand for crude oil loading services,
Kinder Morgan and Keyera are currently evaluating a possible expansion
of up to 125,000 barrels per day of additional crude loading capacity
and the possible addition of a diluent recovery unit. The commercial
discussions to determine customer support for such an expansion are
expected to begin shortly.
Disclaimer
This document contains forward-looking statements based on current
expectations and assumptions made by the management of each of Keyera
and Kinder Morgan respectively relating to, among other things, each
party's business, the environment in which each 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: obtaining all necessary
governmental approvals for the Alberta Crude Terminal, proposed
pipelines and the associated facilities; future operating results of
the assets; ability execute strategic initiatives; 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; 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 either Keyera or Kinder Morgan will be
realized or that they will have the expected consequences for or
effects.
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. For further information about Keyera, please visit our website
at www.keyera.com.
About Kinder Morgan
Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline
transportation and energy storage company and one of the largest
publicly traded pipeline limited partnerships in America. It owns an
interest in or operates more than 54,000 miles of pipelines and
180 terminals. The general partner of KMP is owned by Kinder Morgan,
Inc. (NYSE: KMI). Kinder Morgan is the largest midstream and the third
largest energy company in North America with a combined enterprise
value of approximately $115 billion. It owns an interest in or
operates approximately 82,000 miles of pipelines and 180 terminals.
Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and
chemicals and handle such products as ethanol, coal, petroleum coke and
steel. KMI owns the general partner interests of KMP and El Paso
Pipeline Partners, L.P. (NYSE: EPB), along with limited partner
interests in KMP, Kinder Morgan Management, LLC (NYSE: KMR) and EPB.
For more information please visit www.kindermorgan.com.
SOURCE: Keyera Corp.
