Keyera to acquire Pipestone infrastructure project from Encana under multi-year deal
The Calgary-based oil and gas operator will purchase a gas processing facility and transportation hub currently under construction near Grande Prairie, Alta., with operations expected to start in the fourth quarter of 2018
CALGARY—A subsidiary of oil and gas operator 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 natural gas firm 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.
Keyera also has the option to assume operatorship five years from the startup of a natural gas processing and liquids stabilization plant.