Provident News Release Archive
Provident Announces Long-Term Lease Agreements for $100 Million Storage Project with NOVA Chemicals
Sep 15, 2011
All values are in Canadian dollars unless otherwise indicated.
CALGARY, Sept. 15, 2011 /CNW/ - Provident Energy Ltd. (Provident) (TSX: PVE) (NYSE: PVX) announces today that it has entered into agreements with NOVA Chemicals Corporation (NOVA Chemicals) for the lease of two underground storage caverns currently under development at the Provident Redwater Facility, along with associated facilities to be constructed.
"Our Redwater Facility is a key growth platform for Provident and we are excited to be providing NOVA Chemicals with these new storage services," said Doug Haughey, Chief Executive Officer. "Our capital spending is focused on fee-for-service business like this."
The total amount of storage leased under these long-term agreements is approximately one million barrels with staged on-stream dates of Q3 2012 and Q1 2013. The total capital cost of the caverns, and associated facilities, is anticipated to be approximately $100 million. A portion of this capital was already included in Provident's expanded 2011 capital program and an estimated $77 million remains to be spent in 2012, approximately half of which is incremental to Provident's previously indicated future growth capital estimate of $70 million per year. Both caverns and the associated facilities have been leased on a cost-of-service basis for the exclusive use of NOVA Chemicals.
These caverns are two of several Provident plans to develop to meet the strong market demand for underground hydrocarbon storage in the greater Fort Saskatchewan area.
Provident Energy Ltd. is a Calgary-based corporation that owns and manages a natural gas liquids (NGL) infrastructure and logistics business. Provident's facilities are strategically located in Western Canada and in the premium NGL markets in Eastern Canada and the U.S. Provident provides monthly cash dividends to its shareholders and trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbols PVE and PVX, respectively.
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