Keyera Facilities Income Fund Announces Long-Term Oil Sands Services
Agreement with Husky Oil

CALGARY, Oct. 18 /CNW/ - Keyera Facilities Income Fund ("Keyera") (TSX:KEY.UN; KEY.DB; KEY.DB.A) announced today that it has entered into a long-term agreement with Husky Oil Operations Limited ("Husky") to provide diluent transportation, storage and rail offload services in the Edmonton/Fort Saskatchewan area for the proposed Husky-operated Sunrise Oil Sands Project.  This agreement will provide Keyera with secure, long-term, fee-for-service revenues and complements the diluent services agreement Keyera signed in 2009 with Imperial Oil for their Kearl oil sands project.

Under the terms of the agreement, Keyera will transport diluent by pipeline from supply sources in the Edmonton area to a diluent transportation pipeline inlet north of Fort Saskatchewan for further delivery to the Sunrise site, located 60 kilometers northeast of Fort McMurray.  Keyera will also provide diluent storage and rail offload services at the Alberta Diluent Terminal ("ADT") and the Edmonton Terminal, both owned 100% by Keyera, as well as at the Keyera-operated Fort Saskatchewan Fractionation and Storage Facility.

In addition to utilizing its existing facilities, Keyera will be utilizing capacity in the new pipeline and pumping infrastructure it is constructing in order to provide similar services to Imperial Oil for their Kearl oil sands project.  Keyera expects to begin receiving fee-for-service revenues associated with the agreement with Husky in early 2014.  The agreement is subject to full sanctioning of the Sunrise Oil Sands Project by Husky and its partners.

"Husky brings world class expertise in the production of heavy oil and bitumen to the Sunrise Oil Sands Project, one of the largest oil sands projects in Alberta, and we are delighted to partner with them" said Jim Bertram, President and CEO of Keyera.  "This agreement with Husky demonstrates our commitment and ability to grow our oil sands services business. The investments we have made, and continue to make, strengthen our position and enhance our ability to handle the receipt, transportation and storage of diluent for oil sands producers as the oil sands sector grows."

Benefits to Keyera

Some of the key benefits to Keyera include:

• long-term, fee-for-service revenues with a substantial portion of the fees not being dependent on throughput volumes;
• minimal capital expenditures; and
• opportunities to provide additional services as a result of the additional volumes of condensate associated from these agreements, such as:
• Storage in tanks and underground caverns at Keyera's facilities;
• Rail offload services at ADT and the Edmonton Terminal; and
• Connections to other diluent delivery pipelines servicing the Fort McMurray, Cold Lake and Peace River oil sands areas.

Description of Services

• Transportation -  Keyera will provide Husky with transport capacity within existing and new-build pipeline infrastructure to match Husky's expected diluent requirements for its Sunrise development.  The transportation portion of the agreement has a term of 20 years.  Husky will pay an annual capital payment based on a portion of the new capital investment relating to their capacity commitment.  In addition, Husky will pay a per-barrel tariff for their volumes contracted on the existing Fort Saskatchewan pipeline system.
• Storage -  Keyera will also provide Husky with diluent storage services using its storage capacity in the Edmonton/Fort Saskatchewan area.  The multiple supply connections and high rate injection/withdrawal capabilities will enable Keyera to meet Husky's storage needs. Husky will pay a fixed monthly fee for this service.  The storage portion of the agreement has a minimum term of 10 years
• Rail Offload -  Keyera will provide diluent offload services for Husky at rail terminals located at ADT and the Edmonton Terminal.  ADT and the Edmonton Terminal are currently connected to Keyera operated pipeline infrastructure and storage facilities in the Edmonton/Fort Saskatchewan area.  Husky will pay a per-barrel fee for the rail offload service. The rail offload agreement is for a 3 year term.

Disclaimer

This document contains forward-looking statements that involve known and unknown risks and uncertainties, many of which are beyond Keyera's control. The forward-looking statements are based on management's current expectations and assumptions relating to Keyera's business, the environment in which it operates and the Sunrise project. As the results or events predicted or implied in these forward-looking statements depend upon future events, actual results or events may differ materially from those predicted. Some of the factors which could cause actual results or events to differ materially include: the ability of Keyera to successfully implement strategic initiatives and the degree to which such initiatives yield the expected benefits; any failure or delay in obtaining required regulatory approvals or other project approvals and consents; any failure to satisfy conditions precedent to the agreement; changes to the Sunrise Oil Sands Project or to the planned timetable or scope of the project; changes in Keyera's operating and other costs; future operating results and the components of those results; fluctuations in the demand for natural gas, NGLs, crude oil and bitumen; changes in commodity prices; the activities of producers, competitors, landowners, infrastructure owners and others; overall economic conditions; construction costs or delays; events affecting access to capital or the cost of financing; proposed or actual legislative changes, including in relation to the environment, royalties, oil sands development or energy infrastructure; 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.

For additional information on these and other factors, see Keyera's public filings on www.sedar.com. Unless otherwise required by applicable laws, Keyera does not intend to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

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For further information:

about Keyera Facilities Income Fund, please visit our website at www.keyera.com or contact:

John Cobb, Director, Investor Relations or Bradley White, Investor Relations Advisor.
E-mail: [email protected], Telephone: [phone], Toll Free: [phone], Facsimile: [phone].