December 8, 2011 / 1:53 PM / 7 years ago

UPDATE 1-Keyera to buy iso-octane facility for $198 mln

Dec 8 (Reuters) - Canada’s Keyera Corp said it will buy Alberta EnviroFuels, an iso-octane manufacturing business jointly owned by subsidiaries of Finland’s Neste Oil Oyj and Chevron Corp, for $198 million.

The deal, which includes a 13,600 barrel per day iso-octane manufacturing facility and sales contracts with major refiners, is expected to close early next year, Keyera said in a statement.

Iso-octane, a key requirement for Keyera’s natural gas liquids business, is a low emission, high octane gasoline blending component derived from butane.

Alberta EnviroFuels — the largest iso-octane manufacturing facility in the world — ships the component to Chevron’s Burnaby, British Columbia refinery and to customers in California.

Calgary-based Keyera, which operates one of the largest natural gas midstream businesses in Canada, expects maintenance costs of about C$6-C$9 million per year. (Reporting by Gowri Jayakumar in Bangalore; Editing by Viraj Nair)

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