The facility, which will be called the Alberta Crude Terminal, will be able to load crude oil handled at Kinder Morgan's Edmonton Terminal onto trains for delivery to North American refineries.
The terminal will have 20 loading spots and will be able to load about 40,000 barrels of crude oil into tank cars per day.
It will be operated by Keyera and served by both Canadian National Railway (TSX:CNR) and Canadian Pacific Railway (TSX:CP).
Keyera will pay for about $65 million of the costs, while Kinder Morgan will pay approximately $33 million.
The new terminal is expected to be commissioned during the second quarter of 2014, pending regulatory approvals.
In a statement, Keyera said the new facility will "help address some of the crude oil delivery constraints currently being experienced by the Alberta energy sector."
Kinder Morgan said the plan will help it grow its crude by rail terminal network.
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