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Keyera establishing crude storage terminal operation in Cushing OK

May 23, 2018
Keyera establishing crude storage terminal operation in Cushing OK

Keyera Corp, a Canadian midstream operator, has announced the development of a crude oil storage and blending terminal in Cushing OK. The Wildhorse Terminal will include 12 above ground tanks with 4.5 million barrels of working storage capacity. Most of the capacity is backed by fee-for-service, take-or-pay storage arrangements ranging from two to six years in length.

Wildhorse initially will be pipeline-connected to two existing storage terminals at Cushing. These connections will provide customers with access to a majority of the crude oil streams flowing in and out of Cushing on several major pipeline networks. Keyera's US subsidiary, Keyera Energy Inc, will oversee construction of the terminal and operate Wildhorse once it is in service, which is expected by mid-2020.

"The Wildhorse terminal is a strategic investment for Keyera as it expands our midstream infrastructure in the United States at one of the largest crude oil storage and trading hubs in North America," said David Smith, Keyera's President and Chief Executive Officer. "The terminal also increases our fee-for-service business, extends our crude oil value chain, and provides significant opportunities to capture marketing margins through the use of our logistics and commercial expertise."

Keyera Energy has awarded Matrix Service Inc the contract for engineering, procurement, fabrication, and construction of the Wildhorse Terminal, a greenfield aboveground crude oil storage and blending terminal.

“We are extremely proud to have been awarded this project, which is representative of our leading position in the design and construction of above ground storage terminals” said John R Hewitt, chief executive officer of Matrix Service Company. “We appreciate the opportunity Keyera has provided to us to support their business objectives of further enhancing and diversifying their liquids business. We look forward to working with them to complete this project safely and with the highest degree of quality, on time and on budget.”

Based on current capital estimates, Keyera expects its share of the capital costs to be approximately US$185 million. Keyera now expects to invest growth capital of between $1.0 billion and $1.1 billion in 2018 and is well positioned to fund this program.

An affiliate of Lama Energy Group (LEG) will own 10% of the project. LEG will have the option to increase its ownership to up to 30% by the end of 2018.

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