CALGARY, May 16, 2016 /CNW/ – Keyera Corp. (TSX:KEY) (“Keyera”) today announced that it has entered into agreements with a subsidiary of a large creditworthy multi-national producer for construction of a natural gas gathering and processing complex in the Wapiti area south of Grand Prairie, Alberta (the “Project”).
Subject to final sanctioning, the Project is expected to include a sour gas processing plant with acid gas injection capabilities, condensate processing facilities, associated gathering systems and field compressor stations. Either party may trigger the sanctioning decision at any time prior to the end of 2018. Based on preliminary estimates, Keyera expects the total cost of the Project to be approximately $600 million, with operations of the first phase targeted to start up in mid-2019.
The Project will be designed to process up to 300 million cubic feet per day of sour gas and 25,000 barrels per day of field condensate. The gas processing facilities are expected to be constructed in phases of 150 million cubic feet per day of capacity. Keyera is also evaluating options for a pipeline connection to Keyera’s Wapiti raw gas gathering pipeline and Simonette gas plant.
Under the agreements, Keyera has acquired the main Project site, all third-party engineering work completed for the Project to date and a successfully-tested acid gas injection well for a total cost of approximately $19 million. Over the next several months, Keyera will complete a front-end engineering and design study and a detailed cost estimate for the Project.
The agreements include an area dedication and a take-or-pay commitment under a long-term gas handling agreement. Keyera is also negotiating with other producers in the area to commit additional volumes.
“Keyera has been looking for the right opportunity to increase its presence in the liquids-rich Montney,” said David Smith, Keyera’s President and Chief Executive Officer. “This Project, along with our Wapiti pipeline and Simonette gas plant, provide Keyera with an exciting position in a prolific geological zone that is one of the most economic development areas in the Western Canada Sedimentary Basin. We look forward to working with area stakeholders to develop this infrastructure in an environmentally and financially responsible manner.”
About Keyera
Keyera Corp. (TSX:KEY) operates one of the largest midstream energy companies in Canada, providing essential services to oil and gas producers in the Western Canada Sedimentary Basin. Its predominantly fee-for-service based business consists of natural gas gathering and processing, natural gas liquids processing, transportation, storage, marketing, iso-octane production and sales, and an industry-leading condensate system in the Edmonton/Fort Saskatchewan area of Alberta. Keyera strives to provide high quality, value-added services to its customers across North America and is committed to conducting its business ethically, safely and in an environmentally and financially responsible manner.
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