Keyera Invests $65 Million to Expand Gathering and Processing Presence in
West Central Alberta

CALGARY, June 9 /CNW/ - Keyera Facilities Income Fund ("Keyera") (TSX:KEY.UN; KEY.DB; KEY.DB.A) announced today that it is significantly expanding its gas processing capability in west central Alberta. Keyera will invest approximately $65 million to acquire ownership interests in two additional gas plants and increase its ownership interests in four of its existing gas plants. Upon completion of these transactions, Keyera will have ownership interests in 17 gas plants and will increase its net gas processing capacity by 9%, or 151 million cubic feet per day. All of the incremental capacity is able to extract NGLs and handle sour gas. Portions of the acquisitions are subject to rights of first refusal. All of the acquisitions are expected to close by July 15, 2010, subject to normal closing conditions.

Under the terms of the agreements, Keyera will acquire a 57% ownership interest in the Minnehik Buck Lake gas plant and a 20% ownership interest in the Edson gas plant. In addition, it is acquiring various ownership interests in the Keyera-operated West Pembina, Nordegg River, Gilby and Brazeau River gas plants. Included in the transactions are interests in approximately 260 kilometres of gathering pipelines and nine compressor stations. Also, as part of the transactions Keyera will acquire approximately 12 billion cubic feet of proved plus probable natural gas reserves and approximately 711 thousand barrels of natural gas liquids reserves. Current production is approximately 4 million cubic feet per day of natural gas and about 350 barrels per day of natural gas liquids.

All of the acquisitions are located in the heart of Keyera's operations in west central Alberta. The Minnehik Buck Lake plant is located between Keyera's Rimbey and Bigoray gas plants, in an area with significant geological prospectivity. The plant's extensive gathering infrastructure and ability to process sour gas and extract natural gas liquids will enhance Keyera's processing options for producers. As the largest owner in the Minnehik Buck Lake plant, Keyera will be submitting a proposal to the plant's operating committee to become operator of the plant. The Edson gas plant extends Keyera's reach northwest in the foothills region, into an area that has relatively under developed lands and attractive geology, characteristics similar to those that make the location of Keyera's existing foothills facilities attractive.

"These transactions are a continuation of our growth strategy in the Gathering and Processing segment of our business," said Jim Bertram, President and CEO of Keyera. "The new plants meet all of our evaluation criteria. They are in areas where the geology is prospective and have the potential to continue to benefit from horizontal drilling and multi-stage fractionation techniques. As well, because these plants are connected to significant gathering pipeline infrastructure and are capable of extracting NGLs, they are a good fit with our Liquids Business Unit operations and overall integrated business strategy. We are also pleased to acquire additional interests in four of our existing plants, as this simplifies administration and gives us better opportunities to maximize the benefits of our business development initiatives."

Assets Acquired in the Transactions

    
    Minnehik Buck Lake Gas Plant
    -   A 57% interest in the Minnehik Buck Lake gas plant. The plant has a
        license capacity of 100 million cubic feet per day and is able to
        process sweet and sour gas, and extract natural gas liquids. Current
        throughput is approximately 50 million cubic feet per day.
    -   An approximate 60% interest in the plant inlet compressor, nine
        compressor stations, and approximately 260 kilometres of sweet and
        sour gathering pipelines.
    -   A 57% ownership interest in the Minnehik Buck Lake Gas Unit No. 1 and
        a 100% ownership interest in certain non-unit wells, which deliver
        production to the plant for processing.

    Edson Gas Plant
    -   A 20% ownership interest in the Edson gas plant. The Edson gas plant
        is operated by Talisman Energy Inc. It has a license capacity of
        375 million cubic feet per day and is able to process sweet and sour
        gas, and extract natural gas liquids. Current throughput is
        approximately 215 million cubic feet per day.

    West Pembina Gas Plant
    -   An additional 7% ownership interest in the Keyera West Pembina gas
        plant, bringing Keyera's ownership to 76%.
    -   An approximate 20% ownership interest in a field compressor and an
        additional 8% ownership interest in the Keyera West Pembina sulphur
        blocking facility.
    -   A 100% interest in approximately 125,000 tonnes of sulphur inventory,
        located at the West Pembina plant.
    -   A 29% ownership interest in the Nisku S Pool and an 11% ownership
        interest in the Nisku W Pool, which deliver production to the West
        Pembina gas plant for processing.

    Nordegg River Gas Plant
    -   An additional 7% ownership interest in the Keyera Nordegg River gas
        plant, bringing Keyera's ownership to 89%.
    -   An additional 11% ownership interest in the Nordegg River gas plant
        inlet compression, bringing Keyera's ownership to 83%.

    Gilby Gas Plant
    -   An additional 1.7% ownership interest in various components of the
        Keyera Gilby gas plant, bringing Keyera's ownership to 79%.

    Brazeau River Gas Plant
    -   An additional 1% ownership interest in the Keyera Brazeau River gas
        plant, bringing Keyera's ownership to 92%.
    

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 or waiver of all conditions to closing of the acquisitions; decisions by other owners to exercise rights of first refusal; closing of the transactions occurring on time and without amendment; future operating results of the assets, including the related reserves; future operating results of Keyera's business segments and the components of those results; Keyera's ability to execute its strategic initiatives, including being appointed as operator of Minnehik Buck Lake; 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; liabilities inherent in oil and natural gas operations; 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. All statements relating to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future. As Keyera does not yet own the assets to be acquired, all information regarding such assets contained herein, including all reserve and related information, production and throughput information, has been derived by necessity from information provided by the vendors and other third parties.

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]