Keyera has acquired the remaining 50% non-operating interest in the KAPS Pipeline project in Canada from Stonepeak for C$1.21bn ($860m).
The transaction closed concurrently with the announcement, giving Keyera full ownership and operational control of the KAPS Pipeline system.
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The 575km pipeline network moves natural gas liquids (NGL) and condensate from the Montney and Duvernay plays in north-west Alberta to Keyera’s Fort Saskatchewan processing and storage hub.
According to Keyera, more than 120,000 barrels per day (bpd) of additional commitments have been secured across KAPS Zones 1–4 since 2025.
Construction of Zone 4 remains on schedule, with an expected in-service date in mid-2027.
The company indicated that full ownership of the KAPS Pipeline is designed to provide customers with greater flexibility in connecting production to markets.
Keyera stated that the acquisition is expected to be low-single-digit accretive to distributable cash flow per share over the coming years.
After the completion and ramp-up of Zone 4 through 2030, the pipeline will deliver notable free cash flow supported by contracted volume growth and low maintenance requirements, said the company.
Keyera president and CEO Dean Setoguchi said: “This transaction is directly aligned with our strategy to enhance and extend our integrated value chain and deliver competitive services that help our customers maximise value for their products.
“Full ownership of KAPS provides greater flexibility and efficiency for our customers while enhancing Keyera’s exposure to long-term growth and highly contracted cash flows.”
Keyera has updated its targeted fee-based adjusted earnings before interest, taxes, depreciation and amortisation per share compound annual growth rate (CAGR) for 2025–27 to between 16% and 18%, from its previous range of 15–17%.
The targeted CAGR for 2027–29 remains at 7–8%.
The company highlighted that cash flows from the KAPS system are supported mainly by long-term contracts. Around 75% of volumes are under take-or-pay arrangements and an average contract duration of roughly 12 years.
To finance the acquisition, Keyera drew on existing credit facilities.
The company has also agreed to issue C$525m of common equity through a bought deal offering, with details announced separately.
Proceeds from the equity offering and future debt financing are expected to be used to repay borrowings.
Keyera was advised by RBC Capital Markets, with Norton Rose Fulbright Canada and McCarthy Tétrault providing legal counsel.
Stonepeak was advised by Scotia Capital, with Sidley Austin, Stikeman Elliott and Goodmans as legal advisors.
