Keyera to develop new Cushing terminal
Keyera Corp. has announced the development of a crude oil storage and blending terminal in Cushing, Oklahoma. The Wildhorse Terminal ("Wildhorse") will include 12 above ground tanks with 4.5 million barrels of working storage capacity. The majority of the capacity is backed by fee-for-service, take-or-pay storage arrangements ranging from two to six years in length.
Wildhorse will initially be pipeline connected to two existing storage terminals at Cushing. These connections will provide customers with access to the majority of the crude oil streams flowing in and out of Cushing on several major pipeline networks. Keyera's U.S. subsidiary, Keyera Energy Inc., will oversee construction of the terminal and operate Wildhorse once it is in service, which is expected by mid-2020. An affiliate of Lama Energy Group ("LEG") will own 10% of the project. Based on current capital estimates, Keyera expects its share of the capital costs to be approximately US$185 million. LEG will have the option to increase its ownership to up to 30% by the end of 2018.
As a result of this announcement, 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.
"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."