Keyera Facilities Income Fund said it will construct its Carlos pipeline from the Keyera Rimbey gas plant into the Hoadley region of central Alberta. The pipeline will allow area producers to deliver liquids-rich gas to the Rimbey plant, which is equipped to remove a high percentage of natural gas liquids (NGL) from the gas stream.

The Hoadley area is undergoing active development as multiple producers target liquids-rich natural gas reserves found in the Glauconite geological zone, Keyera said.

"With the construction of the Carlos pipeline project, we will be able to deliver NGL-rich production in the area to our Rimbey plant, which is one of the most flexible and efficient gas processing plants in Canada," said Keyera CEO Jim Bertram. "The Rimbey plant is able to extract a 'deep cut' of NGLs, fractionate them into specification ethane, propane, butane and condensate, and deliver these products directly into the Edmonton/Fort Saskatchewan NGL energy hub. These services allow us to assist our customers in maximizing their production netbacks."

The 45-kilometer (28-mile), 12-inch diameter raw gas gathering pipeline is expected to be in service in the second quarter of 2011. The project has received all necessary regulatory approvals. Total cost is estimated to be C$30 million.

Keyera said it has secured a long-term, fee-for-service transportation and processing agreement with producer Bonavista Energy Trust.

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