Keyera becoming a major Western Canadian midstream player

Calgary-based Keyera Corp. has grown as a Western Canadian midstream player since its inception in 1998, emerging as one of two fully integrated well-head to end-product marketing NGL service providers—along with Pembina Pipeline Corp.—upon 2023 completion of its Key Access Pipeline System (KAPS).

The company is set to expand its midstream footprint further with its announced acquisition of Plains All American’s Canadian NGL assets, the sanctioning of, and proposed plans for, new fractionation and NGL pipeline projects, and two long-term agreements to export LPG from Canada’s West Coast.

Plains’ acquisition

On June 17, 2025, Keyera announced a definitive agreement to acquire essentially all of Plains’ Canadian NGL business—and select US assets—for $5.15 billion (Can., $3.72 billion US) in cash.

Plains’ Canadian assets include large-scale NGL extraction, fractionation, storage, pipelines, and rail and truck terminals at hubs in Fort Saskatchewan and Empress, Ala., and Sarnia, Ont., and C3+ and C5+ pipeline systems from Deep Basin to Edmonton and Fort Saskatchewan. 

These assets complement Keyera’s existing integrated NGL operations, supporting the Calgary-based company’s growth strategy by adding scale and geographic reach (Fig. 1).

"This is a highly strategic acquisition that strengthens our core business and accelerates our growth trajectory. The assets we are acquiring are high-quality, synergistic, and strongly aligned with our operational footprint and expertise. This transaction enhances our ability to serve customers, capture meaningful operational efficiencies, and deliver sustainable long-term value for shareholders, while also helping to reinforce Canada's position as a global energy leader,” said Dean Setoguchi, president and chief executive officer of Keyera.

On their own, the Plains assets are an integrated NGL system connecting Western Canada to key demand centers across the prairie provinces, Ontario, and the eastern US.

Along with Keyera’s current NGL infrastructure—much of it at its Fort Saskatchewan hub in Alberta’s Industrial Heartland, near  Edmonton—and the company’s recent agreements with AltaGas Ltd. to export LPG from Canada’s West Coast, the combined assets will allow Keyera access to high-demand, high-netback Asian markets while still reaching key consumption hubs in eastern Canada and the US.

The purchase is fully financed through a secured and committed bridge facility with the Royal Bank of Canada and a syndicate of other lenders. A concurrent $1.8 billion (Can.) bought-deal equity offering and subsequent debt financing de-risks Keyera’s funding plan.

The Plains acquisition is expected to close in first-quarter 2026, subject to regulatory approvals.

Upon closing, Keyera will have 284,000 b/d of C3+ fractionation capacity—almost triple its existing capacity—about 2 million b/d of NGL-pipeline capacity, and about 44 million bbl of NGL storage. The company also will have about 5.7 bcfd (gross) of straddle-plant capacity at Empress.

Setoguchi further said the acquisition fits with Keyera’s long-term strategy of expanding its integrated, fee-for-service NGL platform through disciplined growth to support Western Canada’s growing natural gas and NGL production.

Keyera expects Montney, Deep Basin, and Duvernay gas production to grow by about 6 bcfd by 2040, with associated NGL volumes increasing by 500,000 b/d (Fig. 2).

Growing fractionation capacity

One component of Keyera’s growth strategy has been expansion of its C3+ fractionation, with plans to increase its post-Plains acquisition capacity of 284,000 b/d by more than half over the next several years.

On July 23, 2025, Keyera filed an initial project description with the Impact Assessment Agency of Canada (IAAC) outlining its plans for the proposed Josephburg project, a 100,000-b/d fractionator to separate NGL from its KAPS pipeline into higher value product streams (Fig. 3).

The fractionator is expected to recover 2,350 b/d of LPG, 30,060 b/d of lighter pentanes, 36,350 b/d of C8+ condensate, and 30,630 b/d of atmospheric bottoms.

Project engineering and design work is under way and expected to be completed by end-2025, while Indigenous and community consultation is under way and to be ongoing (Fig. 4). Keyera expects to submit the project for regulatory approvals in second-quarter 2026, with construction beginning in second-quarter 2028.

Keyera is targeting the Josephburg project to be online by third-quarter 2030, as construction is anticipated to take 2 years. The project schedule could be delayed by 2-3 years should an impact assessment under the IAAC be required.

The proposed project is sited entirely on previously disturbed private land—farmstead and pasture—in Alberta’s Industrial Heartland, Canada’s only pre-zoned industrial area. Potential environmental effects from the construction and operation of the project are expected to be limited to air emissions, noise, minor alteration or loss of wildlife habitat, and replacement of a small number of wetlands, according to Keyera.

Keyera has yet to release a cost estimate for the Josephburg project.

On May 15, 2025, Keyera noted the sanctioning of the Keyera Fort Saskatchewan (KFS) Frac III project, a 47,000-b/d expansion to the company’s core fractionation hub also in Alberta’s Industrial Heartland. The project is expected to cost $500 million (Can.), including investments to enhance egress capability at the plant. Detailed design is under way and early works construction activities at the site have begun, with the project targeted to enter service in mid-2028.

Earlier this year, on Feb. 13, 2025, Keyera noted sanctioning of the KFS Frac II Debottleneck project to add about 8,000 b/d of capacity to the plant at a cost of $85 million (Can.). Fabrication of major equipment and on-site construction began this summer, with the additional capacity expected to come online in mid-2026.

In February 2023, Keyera noted closing of a previous deal with Plains Midstream Canada, the acquisition of its 21% working interest in the KFS complex for $366.5 million (Can.) (US$270 million). The deal brought Keyera’s total ownership in KFS to 98%—the remaining 2% is owned by an ExxonMobil affiliate—while increasing its fractionation capacity at the complex by 14,000 b/d to 65,000 b/d.

Keyera’s current fractionation capacity and the additional capacity to be added by the KFS Frac II Debottleneck and KFS Frac III projects is substantially contracted, making the sanctioning of the Josephburg project important for the company’s future growth.

KAPS pipeline extension

On June 9, 2025, Keyera noted sanctioning of KAPS Zone 4, an extension and expansion of KAPS (Fig. 2).

The KAPS Zone 4 project is an 85-km extension of the existing KAPS NGL and condensate pipeline (Zone 1-3) from Pipestone to Gordondale, Alta., where it will connect to NorthRiver Midstream's Northeast B.C. Connector project. This extension and expansion increase Keyera's connectivity to the growing liquids-rich Montney regions of northeast British Columbia and northwest Alberta.

Keyera does not disclose KAPS capacities for commercial reasons, but it is public that ultimate full capacity of Zone 1-3 will be 350,000 k/d once full pumping capacity is installed.

KAPS Zone 4 is projected to cost $220 million (Can.) (net to Keyera), including investments in additional pumping capacity on KAPS Zones 1 to 3. KAPS is operated by Keyera and 50% owned by New York-based investment firm Stonepeak.

Engineering is under way on KAPS Zone 4, and long-lead items have been ordered, according to the company. The project is targeted to enter service in mid-2027. The existing 575-km KAPS pipeline from Pipestone to Alberta’s Industrial Heartland entered service in October 2023.

Together, these systems offer Montney producers a route from northeast British Columbia to Fort Saskatchewan-area fractionation and Keyera's condensate hub, according to Setoguchi.

Keyera has secured more than 75,000 b/d of new contracted volumes across KAPS Zones 1 through 4 in recent months, with substantially all volumes also committed to incremental downstream services.

LPG exports

On Feb. 7, 2025, Keyera noted the first of two long-term commercial agreements with Calgary-based AltaGas Ltd., a North American utilities and midstream company, to export LPG via its Ridley Island infrastructure on the West Coast of Canada.

The first agreement is a 15-year tolling contract at AltaGas' currently under-construction Ridley Island Energy Export Facility (REEF) for 12,500 b/d of LPG export capacity. Before this agreement, Keyera flowed 5,000 b/d through AltaGas' Ridley Island Propane Export Terminal (RIPET) on a short-term contract basis to get a better sense of the Asian market.

"This collaboration with AltaGas strengthens our integrated value chain and creates more diversified sales opportunities for our customers, enabling them to consistently reach the highest value markets" said Setoguchi.

Construction on AltaGas’ REEF project is progressing on schedule, and the terminal is targeted to come online near end-2026.

Also in June Keyera detailed a second 15-year tolling agreement with AltaGas to export an additional 12,500 b/d of LPG via its West Coast export infrastructure starting in 2028, once Keyera’s KFS Frac III Expansion project comes online.

These two tolling agreements will provide Keyera customers with more diversified market access for LPGs, including to Asian markets, while providing AltaGas with long-term ratable export volumes and cash flows.

At 10 shipping days to fast-growing LPG demand markets in Northeast Asia, AltaGas’ LPG export terminals provide a 15-day shipping advantage over LPG exported from the US Gulf Coast, according to the company.