Capitalizing on strong market fundamentals for NGLs and condensate demand growth, Keyera continues to add storage caverns at its facility in Fort Saskatchewan. Construction of the thirteenth and fourteenth underground storage caverns are currently under development. This next phase of cavern development is anticipated to add approximately four million barrels of additional storage capacity at the site. As part of this program, we expect to begin drilling the fifteenth cavern late 2014.
Keyera’s 11.4 million barrels of underground storage capacity is a key competitive advantage These caverns, in addition to our other service offerings offers a one stop shop to our producer customers as we can process, fractionate, store, transport and market their NGLs.
Why is Storage Needed?
The North American demand for propane can vary from summer to winter due to its use for heating homes during colder weather. However, because natural gas liquids are by-products of natural gas production, they are produced throughout the year across western Canada.
Seasonal demand translates into price volatility for commodities. Keyera is able to mitigate supply/demand fluctuations by using its storage facilities by purchasing NGLs during summer months when demand is low and storing the NGLs until the market needs those liquids in the winter months, or alternatively charging a fee to customers who want to store their own liquids.
As bitumen production from Alberta’s oil sands developments grows, the demand for condensate is increasing, resulting in additional demand for condensate storage. Condensate is a natural gas liquid that is used as a diluent to help bitumen flow through pipelines.
Keyera also stores butane to build up feedstock for use at Alberta EnviroFuels, where it produces iso-octane.