Keyera Acquires Remaining 50% Stake in KAPS for $1.215B

Keyera Corp., a Canadian energy infrastructure company, has completed the acquisition of the remaining 50% stake in the KAPS Pipeline from Stonepeak for $1.215 billion. This acquisition enables Keyera to secure full ownership and operational control of the natural gas liquids pipeline system, which is strategically important in connecting the Montney and Duvernay resource plays to downstream markets.

The transaction reflects Keyera's strategic emphasis on enhancing its integrated value chain and increasing its exposure to stable, fee-based cash flows. Dean Setoguchi, Keyera’s CEO, emphasized that full ownership of the KAPS Pipeline offers greater flexibility and efficiency for its customers, supporting the company's long-term growth through highly contracted volumes. Keyera projects the acquisition will be accretive to distributable cash flow per share over the coming years, and the completion of KAPS Zone 4 by mid-2027 is expected to further bolster cash flow.

As Keyera takes full control of the pipeline, it benefits from long-term contracts averaging 12 years with 75% take-or-pay provisions, underpinning stable cash flow. This acquisition complements Keyera’s goal of increasing its fee-based adjusted EBITDA, aiming for a compound annual growth rate of up to 18% between 2025 and 2027. Keyera anticipates that the integration of KAPS will have minimal maintenance capital requirements and offer potential tax efficiencies.

The acquisition positions Keyera to strengthen its competitive stance within the energy infrastructure sector by leveraging its enhanced service offerings to clients demanding connectivity to lucrative markets. While retaining its investment-grade credit profile and solid balance sheet, Keyera plans to absorb approximately $100 million in incremental 2026 growth capital, connected to the completion of KAPS Zone 4.

Keyera’s acquisition strategy aligns with broader market dynamics where energy infrastructure players are optimizing their asset portfolios to capture long-term value as the industry adapts to changing market conditions. With the targeted increased cash flow generation and strategic asset control, Keyera is positioned to navigate the sector's evolving landscape effectively. The completion of KAPS Zone 4 remains a critical milestone, expected to further enhance the company's revenue base once operational in mid-2027.