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.
Keyera Corp.
John Cobb, 403.205.7670 or Toll Free: 888.699.4853
Vice-President,
Investor Relations
or
Julie Puddell, 403.205.7670 or Toll
Free: 888.699.4853
Manager, Investor Relations
ir@keyera.com
or
Plains
All American Pipeline
Roy Lamoreaux, 713.646.4222 or Toll Free:
800.564.3036
Director, Investor Relations
info@paalp.com