Canada’s Competition Bureau has secured a Federal Court order to advance its investigation into Keyera’s (TSX: KEY) proposed $5.15 billion acquisition of Plains All American Pipeline’s (NASDAQ: PAA) Canadian natural gas liquids business, raising concerns about potential impacts on competition in the oil and gas sector.
The court order, issued on April 8, compels Inter Pipeline Ltd, another key player in the Canadian energy industry, to provide records and information relevant to the probe.
The Bureau is examining whether the deal could substantially lessen or prevent competition, particularly in the natural gas liquids market around Fort Saskatchewan, Alberta—a critical hub where 87% of Alberta’s fractionation activity occurs. The investigation also assesses if the transaction might raise barriers for competitors or further entrench Keyera’s position in the energy infrastructure space.
Keyera, a Calgary-based energy infrastructure firm, announced the transformative acquisition in June 2025, aiming to expand its integrated NGL value chain across western and eastern Canada. The deal, valued at $5.15 billion, includes large-scale NGL extraction, fractionation, storage, pipelines, and terminalling assets in key hubs like Empress, Fort Saskatchewan, and Sarnia.
At the time of announcement, post-acquisition, Keyera’s enterprise value was projected to reach approximately $19 billion, with a 50% increase in fee-based adjusted EBITDA in the first full year following closure.
Despite the regulatory hurdle, Keyera remains optimistic about the transaction’s strategic merits. “We remain fully confident that this transaction is in the best interest of industry, Keyera, and Canada,” said Dean Setoguchi, President and Chief Executive Officer of Keyera. He emphasized that bringing these assets under Canadian ownership would bolster national energy security and enhance competition.
Originally slated for completion by the end of Q1 2026, the deal’s timeline has been pushed to May 2026 due to the ongoing regulatory process. The acquisition is expected to yield $100 million in near-term synergies from corporate cost savings and operational efficiencies, while maintaining Keyera’s leverage within its target range of 2.5 to 3.0 times net debt to adjusted EBITDA.
The deal also promises mid-teens percentage accretion to distributable cash flow per share in the first full year. Pro forma, about 70% of Keyera’s realized margin will come from fee-for-service segments, with 45% tied to take-or-pay contracts, aligning with its current business mix.
Fort Saskatchewan’s role as a linchpin for natural gas liquids—used in heating, petrochemicals, and crude oil blending—underscores the stakes of this investigation. The Bureau’s findings could reshape the competitive landscape in Alberta’s energy corridor, with potential ripple effects across the $19 billion pro forma entity Keyera aims to build by May 2026.
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