Keyera has entered into 10-year gas handling agreements with Athabasca Oil Corporation (AOC) and Murphy Oil Company to process natural gas production from their Montney and Duvernay operations west of Fox Creek, Alberta.
Both gas handling agreements include take-or-pay commitments and facility dedications.
In support of these agreements, Keyera plans to enhance its Simonette gas plant operations with improved inlet liquids handling facilities and acid gas injection facilities. The investments are expected to cost between $85 million and $100 million and be operational in the first half of 2019, assuming regulatory approvals are received on a timely basis and the current construction schedule is maintained. As a result of this project, Keyera now expects to invest growth capital of between $800 million and $900 million in 2018.
To meet growing volume commitments and support additional production in the region, Keyera is also considering an expansion of the processing capacity of its Simonette gas plant. Keyera continues to have discussions with existing and new producers to understand their area development plans in order to finalize the timing and size of an expansion.
"We are pleased to have reached agreements with AOC and Murphy to support their Montneyand Duvernay developments near Fox Creek, Alberta," said Bradley Lock, Keyera's Senior Vice President, Gathering and Processing Business Unit. "Both of these companies have chosen to continue building on our existing relationship in the Simonette area. The planned capital improvements at our Simonette gas plant highlight our commitment to providing reliable and competitive services with a focus on our customers' needs."