Keyera Buys Stonepeak KAPS Stake for C$1.215 Billion, Taking Full Control of Montney and Duvernay NGL Corridor

Keyera Corp. on June 17 completed its acquisition of the remaining 50% non-operating interest in the KAPS Pipeline from Stonepeak, the New York-based infrastructure investment firm, for C$1.215 billion. The transaction grants Keyera 100% ownership and full operational control of the Key Access Pipeline System. KAPS connects condensate and natural gas liquids production from the Montney and Duvernay shale plays in northwest Alberta to Keyera's downstream processing hub at Fort Saskatchewan.

Keyera funded the acquisition through a C$525 million bought-deal equity offering and borrowings under its existing credit facilities, targeting repayment through equity proceeds and future debt issuance. The company expects to maintain net debt to adjusted EBITDA between 2.5 and 3.0 times by 2028. The deal closed concurrently with its public announcement, with no post-closing conditions outstanding.

What KAPS Is and Why Full Ownership Changes the Equation

KAPS spans 575 kilometres through northwest Alberta, carrying condensate on a 16-inch line and NGL mix on a 12-inch line, with design capacity of 350,000 barrels per day. Keyera designed the system to serve the rapidly expanding Montney and Duvernay liquid-rich shale plays, two of Western Canada's largest unconventional resource developments. KAPS Zone 4, a further expansion of the system, is expected online by mid-2027 to capture additional committed volumes from basin growth.

Since 2025, Keyera secured over 120,000 barrels per day of additional customer commitments across KAPS Zones 1 through 4. A total of 75% of KAPS cash flows carry take-or-pay contract protection, with customer contracts averaging 12 years of remaining term. CEO Dean Setoguchi described the full ownership as enabling greater flexibility and efficiency for customers while enhancing Keyera's exposure to long-term growth and highly contracted cash flows.

The Deal Multiple and What It Implies About KAPS Value

Keyera priced the deal at 11 times projected 2029 EBITDA from the 50% stake, according to the company's transaction disclosure. At that multiple, the 50% stake generates C$110.5 million in annual EBITDA by 2029. With 75% of KAPS cash flows under take-or-pay contracts, C$83 million of that annual contribution carries contractual protection against volume risk.

Full KAPS enterprise value, implied by doubling the 50% stake price, reaches C$2.43 billion. Against design throughput of 350,000 barrels per day, the implied valuation reaches C$6,943 per barrel per day of capacity. Keyera expects the acquisition to prove accretive to distributable cash flow per share over several years, with C$100 million in incremental growth capital earmarked for KAPS-related expansion during 2026.

From 50/50 Joint Venture to Full Consolidation

Keyera completed construction of the KAPS pipeline in October 2023 as a 50/50 joint venture with Stonepeak, according to Oil and Gas Journal. The original structure gave Stonepeak a passive financial stake while Keyera operated the system day-to-day. Three years after commissioning, Keyera is consolidating full ownership, following the common Western Canadian midstream pattern of operators buying out financial co-investors once a system's contracted revenue base stabilises.

This acquisition raises Keyera's fee-based adjusted EBITDA per share compound annual growth target from a range of 15 to 17 percent to 16 to 18 percent for the 2025 to 2027 period. Keyera targets net debt of 2.5 to 3.0 times adjusted EBITDA by 2028, consistent with its investment-grade credit profile. Stonepeak, which had held the non-operating 50% interest since KAPS was built, exits through a full cash sale with no deferred consideration.