Keyera Corp. agreed to participate as a 60% owner in the Zeta Creek gas plant being built by Velvet Energy in the West Pembina area of Alberta, the company said in a statement. Keyera will operate the plant, which will have a licensed capacity of 54 million cubic feet per day of sweet gas and be able to extract NGL.

As part of the transaction, Keyera will also participate as a 75% owner in the proposed sales gas lateral pipeline planned from the plant to the TransCanada mainline. Once the pipeline lateral is built, Keyera expects to add another pipeline connection between its Pembina North gas plant and the lateral to help debottleneck the Pembina North facility. Based on current cost estimates, Keyera’s proportionate share for construction of the plant and lateral (excluding the additional Pembina North Pipeline) is expected to be about CA$41 million (US$35.3 million). The plant is expected to enter operations in fourth-quarter 2015. Keyera will provide Velvet with processing capacity at another Keyera facility until the plant is on stream.