Keyera Enters Storage and Terminal Business in Cushing, OK
CALGARY, May 15, 2018 /CNW/ - Keyera Corp. (TSX:KEY) ("Keyera") today announced the development of a crude oil storage and blending terminal in Cushing, Oklahoma. The Wildhorse Terminal ("Wildhorse") will include 12 above ground tanks with 4.5 million barrels of working storage capacity. The majority of the capacity is backed by fee-for-service, take-or-pay storage arrangements ranging from two to six years in length.
Wildhorse will initially be pipeline connected to two existing storage terminals at Cushing. These connections will provide customers with access to the majority of the crude oil streams flowing in and out of Cushing on several major pipeline networks. Keyera's U.S. subsidiary, Keyera Energy Inc., will oversee construction of the terminal and operate Wildhorse once it is in service, which is expected by mid-2020. An affiliate of Lama Energy Group ("LEG") will own 10% of the project. Based on current capital estimates, Keyera expects its share of the capital costs to be approximately US$185 million. LEG will have the option to increase its ownership to up to 30% by the end of 2018.
As a result of this announcement, Keyera now expects to invest growth capital of between $1.0 billion and $1.1 billion in 2018 and is well positioned to fund this program.
"The Wildhorse terminal is a strategic investment for Keyera as it expands our midstream infrastructure in the United States at one of the largest crude oil storage and trading hubs in North America," said David Smith, Keyera's President and Chief Executive Officer. "The terminal also increases our fee-for-service business, extends our crude oil value chain, and provides significant opportunities to capture marketing margins through the use of our logistics and commercial expertise."
Keyera Corp. (TSX:KEY) operates an integrated Canadian-based midstream business with extensive interconnected assets and depth of expertise in delivering midstream energy solutions. 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.
About Lama Energy Group
Lama Energy Group (LEG) was established in 1991 and is one of the leading privately owned investment groups in the Czech Republic. The core business activities are carried out in the Czech Republic, Canada and the USA. LEG's business lines include: Oil & Gas Exploration, Heating & Power Plants, Energy Marketing and Transportation, Telecommunications and Mining, both in the wholesale and retail markets. LEG is powered by over 600 employees in more than 25 companies with the group's headquarters in Prague, Czech Republic. LEG's North American Operations started in 2011 as Petrolama Energy Canada Inc. with its office located in Calgary, Canada. For additional information about Lama Energy Group please visit www.lamagroup.cz.
This news release contains forward-looking statements based on Keyera's current expectations and assumptions made by the management of Keyera relating to its business, the environment in which it operates, its future operations and the performance of its assets, including the proposed terminal. As these forward-looking statements depend upon future events, actual outcomes may differ materially depending on factors such as: the accuracy of the construction schedule and cost estimates; customer interest in the services being offered; future operating results of the assets; the ability of Keyera to execute its strategic initiatives in connection with the terminal; availability and cost of engineering resources, construction crews and materials; timely receipt of all necessary regulatory approvals or changes in requirements; changes in production decline rates; 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 gas plant operation and oil and gas production; environmental liabilities; potential delays or changes in producer development plans in the area; 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 it will have the expected consequences for or effects on Keyera.
For additional information on these and other factors, see Keyera's public filings on www.sedar.com. The information provided in this release is given as of the date hereof. Readers are cautioned that they should not unduly rely on forward-looking information.
SOURCE Keyera Corp.
Additional Information: For further information about Keyera, please visit our website at www.keyera.com or contact: Keyera Corp., Lavonne Zdunich, Director, Investor Relations, or Calvin Locke, Manager, Investor Relations, Email: email@example.com, Telephone: 403.205.7670, Toll Free: 888.699.4853