CALGARY - Natural gas processor Keyera Corp. (TSX:KEY) saw its profits rise 87 per cent in the latest quarter, as demand for bitumen production in Western Canada increased.
The midstream gas company posted Wednesday net earnings of $48.2 million, or 62 cents per share, in the second quarter, compared with $25.8 million, or 34 cents per share, in the same period a year earlier.
Distributable cash flow was $79.3 million, or $1.01 per share, up from $60 million, or 78 cents per share.
Capital expenditures also increased to $79 million in the three months ended June 30, from $35 million in the same period a year ago.
"As producers continue to pursue liquids-rich natural gas and increase bitumen production in western Canada, we are seeing growing demand for handling, processing and delivery services and significant new growth opportunities for Keyera," said chief executive Jim Betram in a news release.
The Calgary-based company said it will increase its monthly cash dividend by 20 cents per share a month, or $2.40 per share annually.
In July, it entered a joint agreement with Kinder Morgan Energy Partners L.P. to build a new crude oil rail loading facility in Edmonton.
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.
Keyera provides a number of services to the natural gas industry, including gathering, processing, storage and transportation.