NGL future bright

Four months after commissioning a $30-million addition to its Rimbey gas plant, Keyera Facilities Income Fund (TSX:KEY.UN) has announced another multimillion-dollar project in Central Alberta.

Four months after commissioning a $30-million addition to its Rimbey gas plant, Keyera Facilities Income Fund (TSX:KEY.UN) has announced another multimillion-dollar project in Central Alberta.

The company, which processes natural gas and natural gas liquids (NGL), plans to upgrade its NGL transport system in west-Central Alberta. Specifically, it will connect its Strachan gas plant near Rocky Mountain House — where raw natural gas from the area is processed — to its Rimbey gas plant and ultimately to fractionation facilities at Fort Saskatchewan.

NGL, which consist of propane and butane, are currently trucked out of the Strachan plant.

“The project will provide another long-term, reliable connection to NGL supply for our Fort Saskatchewan facility, and will also reduce truck traffic in the area of the Strachan gas plant,” said David Smith, executive vice-president with Keyera’s liquids business unit.

Tanis Fiss, Keyera’s manager of external communications, said the project will involve the conversion of existing pipeline for NGL transport. A six-km pipeline will also be constructed between the Strachan plant and a pipeline system running to the Rimbey plant, she added, with the NGL then able to continue north via Keyera’s Rimbey pipeline.

New storage facilites will also be developed at Fort Saskatchewan, with the total capital layout expected to hit $11 million.

“We definitely believe in the natural gas liquids business within Alberta,” said Fiss, adding that the pipeline connection to Keyera’s west-Central Alberta facilities will give the company greater flexibility to serve its customers.

Last year, Keyera added extraction equipment at its Rimbey plant capable of drawing 5,000 barrels of ethane a day from the natural gas being processed there. That ethane now goes to Dow Chemical Canada for conversion into ethylene, and ultimately for the production of petrochemical products at Fort Saskatchewan and Prentiss.

hrichards@bprda.wpengine.com