Keyera Announces Long-Term Sulphur Services Agreement and Facilities Expansion

CALGARY, June 20, 2013 /CNW/ - Keyera Corp. (TSX:KEY) (TSX:KEY.DB.A) ("Keyera") announced today a long-term, fee-for-service agreement to provide sulphur handling and forming services at its Strachan gas plant to Suncor Energy ("Suncor").

This agreement underpins planned modifications to the sulphur receipt and forming facilities at the Strachan gas plant, including the replacement of the existing sulphur forming facility with a new 1,500 tonne per day sulphur forming and degassing unit.  This new unit will use patented technology developed by Brimrock Group Inc. to provide for more efficient conversion of molten sulphur into solid, premium sulphur granules.  Keyera will also be expanding its molten sulphur rail off-loading capability and adding incremental de-gassing and storage capacity to the site.

Suncor will be bringing the sulphur to the Strachan plant from its facilities in the Fort McMurray area for processing.  The volumes to be delivered under the agreement are expected to utilize over half of the sulphur forming capacity at the Strachan plant, with the balance of the capacity being available to support the plant's sour gas processing operations and to provide sulphur handling and forming services for other potential customers.

The agreement with Suncor has a 10-year term and services are provided on a take-or-pay basis. The anticipated cost of the modifications to the sulphur facilities is approximately $40 million and the facilities are expected to be operational in the first half of 2015.

"We're pleased to be able to provide Suncor with this value-added service and believe Strachan is the ideal location to process sulphur," stated David Smith, President and Chief Operating Officer of Keyera. "This agreement allows us to continue to provide premium sulphur handling services at our Strachan gas plant while improving our environmental footprint through the addition of newer, more environmentally friendly and efficient technology."

About the Strachan Gas Plant

The Strachan gas plant, located approximately 200 kilometres southwest of Edmonton, Alberta, offers significant raw gas processing services for natural gas producers in west central Alberta, including NGL extraction and sour gas handling. The Strachan gas plant is Keyera's sulphur hub, providing sulphur handling services to customers including sulphur recovery; sulphur forming; sulphur truck/rail loading and off-loading; and a large sulphur block with storage capacity of approximately 500,000 tonnes. With its connections to three major gathering systems (Strachan North, Garrington Caroline and Burnt Timber/Ram River), the Strachan gas plant is able to attract gas from a large capture area covering approximately 2,500 square kilometres. As one of Keyera's largest gas plants, it is a strategic part of the Keyera gathering and processing infrastructure portfolio.

Disclaimer

This document contains forward-looking statements based on management's current expectations and assumptions relating to Keyera's business, the environment in which it operates, anticipated timing and closing of the acquisitions and the future operations and performance of the assets. As these forward-looking statements depend upon future events, actual outcomes may differ materially depending on factors such as: satisfaction of all conditions in the agreement with Suncor; obtaining all necessary governmental approvals for the modifications and additions to the Strachan gas plant; future operating results of the assets; Keyera's ability to execute its strategic initiatives; construction and input costs; weather conditions; construction scheduling variables; 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 in developing and producing natural gas; 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 will be realized or that they will have the expected consequences for or effects on Keyera.

About Keyera Corp.

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 Natural Gas Liquids (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.

SOURCE: Keyera Corp.

For further information about Keyera, please visit our website at www.keyera.com or contact:

John Cobb, Vice President, Investor Relations, or
Julie Puddell, Manager, Investor Relations
E-mail: [email protected]
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