By The Canadian Press

Keyera to acquire Pipestone infrastructure project from Encana under multi-year deal

Apr 2, 2018 | 7:36 AM

CALGARY – A subsidiary of Keyera Corp. will purchase Encana’s Pipestone liquids hub and the planned Pipestone processing facility in western Alberta under an agreement announced Monday.

The Pipestone liquids hub is under construction near Grande Prairie, Alta., with operations expected to start in the fourth quarter of 2018.

Keyera will acquire and fund the remaining development cost of the hub, estimated at $105 million. It will also own and fund the planned Pipestone processing facility, which is expected to start up in 2021.

Sales proceeds received by Encana are about $39 million.

Encana will be responsible for construction of the project and will initially operate it.

Keyera will own the project and be responsible for commercial development. It will also provide processing services to Encana under a long-term fee-for-service arrangement.

“This Project aligns with Keyera’s strategy of building a stronger presence in the liquids-rich Montney development of northwestern Alberta, where strong geology and attractive economic returns are driving producer activity,” said David Smith, Keyera’s President and Chief Executive Officer. “With Pipestone and the continued build out of our Wapiti and Simonette gas plants, approximately half of Keyera’s gathering and processing margin is expected to be focused on liquids-rich Montney and Duvernay developments. We look forward to working with Encana and stakeholders to develop this Project in a socially and financially responsible manner.”