Keyera, Encana To Jointly Develop Liquids Hub And Natural Gas Processing Plant

(RTTNews) - Keyera Corp. (KEY.TO) announced a 20-year infrastructure development and midstream service agreement with Encana Corp. to support their condensate focused Pipestone Montney development near Grande Prairie, Alberta. Keyera and Encana will jointly develop a liquids hub and a natural gas processing and liquids stabilization plant. Keyera will own the project and provide processing services to Encana under a long-term fee-for-service arrangement with a modest revenue guarantee.

Encana will be responsible for the design and construction of the project and will initially operate the facilities. Keyera will be responsible for all commercial development and has the option to assume operatorship of the project five years after the start up of the natural gas processing and liquids stabilization plant.

The liquids hub is estimated at $105 million and as a result, Keyera now expects to invest growth capital of between $900 million and $1 billion in 2018. The preliminary capital estimate for the Pipestone Plant is between $500 million and $600 million, with a significant amount of the investment expected to occur in 2019 and 2020.