Keyera Corp. has taken a significant step in the energy sector by announcing its intention to acquire Plains’ Canadian natural gas liquids (NGL) business, along with selected assets in the U.S., for an impressive cash consideration of $5.15 billion. This acquisition aims to transform Keyera’s position within the Canadian energy infrastructure landscape by providing a more integrated and expansive NGL value chain.
The acquisition marks a pivotal moment for Keyera, allowing it to acquire nearly all of Plains’ Canadian NGL assets, along with select U.S. holdings. This transaction is expected to enhance Keyera’s already robust liquids infrastructure, which spans both western and eastern Canada. By bringing important Canadian NGL infrastructure under Canadian ownership, Keyera seeks to strengthen domestic energy infrastructure and energy security, ensuring a more resilient economy overall.
The deal is particularly notable as it is set to create immediate value for shareholders, while enhancing service reliability and efficiency for customers through a more integrated platform. The acquisition is expected to deliver operational synergies and increased market access, ultimately providing a broader scope of services across North America.
Transformational Impact on Infrastructure
The acquired NGL infrastructure will significantly bolster Keyera’s existing operations, particularly in regions like Empress, Fort Saskatchewan, and Sarnia. These hubs are integral to the energy supply chain, facilitating the extraction, fractionation, storage, and transportation of essential NGL products such as ethane, butane, and propane. By integrating these assets, Keyera will create a well-connected NGL corridor that extends from western Canada to key consumption areas in the east and into the United States.
Keyera’s President and CEO, Dean Setoguchi, addressed the strategic importance of this acquisition, stating that the high-quality and synergistic assets acquired will align seamlessly with Keyera’s operational expertise. This move is expected to not only enhance operational efficiencies but also reinforce Canada’s stature as a leader in global energy markets.
Financial Considerations and Growth Potential
The purchase price of approximately 7.8 times the expected adjusted EBITDA for 2025 reveals a well-thought-out acquisition strategy, which positions Keyera for significant financial growth. The company anticipates this acquisition to be accretive to distributable cash flow per share, projecting a mid-teens percentage increase in the first year alone. This growth is underpinned by an expected increase of about 50% in fee-based adjusted EBITDA due to the contributions of the newly acquired assets and realized synergies.
Financial prudence remains a cornerstone of Keyera’s operational strategy. The transaction has been structured to maintain Keyera’s solid balance sheet and preserve its investment-grade credit ratings. The planned financing includes an acquisition credit facility and a significant equity offering aimed at fully financing the transaction.
A Commitment to Sustainability
Keyera’s commitment to sustainable energy practices coincides with this acquisition. The company emphasizes its dedication to reducing emissions and implementing environmentally responsible practices across its operations. The integration of these assets presents an opportunity to enhance sustainability measures, further solidifying Keyera’s standing in terms of environmental stewardship and community engagement.
In summary, the acquisition of Plains’ Canadian NGL business represents a transformative moment for Keyera Corp., significantly expanding its integrated NGL value chain and reinforcing its commitment to providing reliable services amid an evolving energy landscape. By enhancing both operational capabilities and growth potential, Keyera is poised to deliver sustained value for its shareholders while contributing to the overall resilience of Canada’s energy infrastructure. This strategic acquisition not only positions Keyera favorably in terms of market reach but also aligns with the company’s long-term vision of growth and sustainability in the energy sector.
Keyera aims to finalize the acquisition in early 2026, subject to regulatory approvals and customary closing conditions. This announcement sets the stage for an exciting evolution in Canada’s energy infrastructure and represents a significant leap toward enhanced energy security and efficiency for a vast network of customers across North America.
