Keyera Announces 2025 Third Quarter Results

Key Takeaways:

• Sustained growth in fee-for-service margins highlights the resilience of Keyera’s integrated system.
• The Marketing segment’s performance dipped due to shifting condensate import dynamics and liquids blending.
• Keyera issued $2.3 billion in senior notes and $500 million in hybrid notes to support the Plains acquisition.
• The company met its 2025 emissions reduction target one year ahead of schedule.
• Major capital projects, including fractionation expansions and KAPS Zone 4, remain on track.

Overview & Third-Quarter Results

Keyera announced its third-quarter 2025 financial results, revealing adjusted EBITDA of $281 million, down from $322 million in Q3 2024. Distributable cash flow (DCF) stood at $181 million, or $0.79 per share, with net earnings of $85 million. Excluding transaction costs tied to the Plains acquisition, adjusted EBITDA and DCF would be slightly higher.

Despite the year-over-year decline, Keyera’s overall performance underscores the ongoing strength of its integrated system. The Gathering and Processing segment and Liquids Infrastructure segment both notched higher margins, more than offsetting part of the softness in the Marketing segment.

Fee-for-Service Success

One of the brightest spots of the quarter was fee-for-service realized margin, which increased by more than 10% compared to the same period last year. This uplift was due to the consistent use of available capacity across Keyera’s North Region Gathering & Processing, KAPS, and fractionation facilities.

In particular, the Gathering and Processing segment realized $112 million in margin, reflecting higher throughput at the Wapiti and Simonette gas plants. Liquids Infrastructure rose to $147 million in quarterly realized margin, largely supported by higher storage and pipeline utilization in the company’s condensate system.

Marketing Segment Dynamics

On the Marketing side, realized margin came in at $73 million, down from $135 million a year earlier. Keyera attributes this decrease to a combination of reduced liquids blending, weaker iso-octane premiums, and lower condensate import volumes, as domestic production displaced imports.

Because of these trends, the company revised its 2025 Marketing guidance to between $280 million and $300 million, a dip from the earlier $310 million to $350 million. While this change reflects an ongoing shift in industry dynamics, Keyera remains positive about its long-term Marketing outlook, citing the overall stability of its integrated platform.

Financial Strength and Acquisition Outlook

During the quarter, Keyera successfully raised $2.3 billion in senior notes and $500 million in hybrid notes, ensuring ample funding for the planned Plains Canadian NGL business acquisition. The deal is on track to close in the first quarter of 2026, pending final regulatory approvals. At the end of the quarter, Keyera’s net debt-to-adjusted-EBITDA ratio rested at 1.7, below its 2.5–3.0 target range.

Sustainability Milestone

Another milestone for the quarter was Keyera’s early achievement of its 2025 greenhouse gas emissions target—an accomplishment reached one year ahead of schedule. Investments that meet strict return thresholds enabled the company to reduce GHG emissions intensity by 25% (Scope 1 and 2, equity share basis, from a 2019 baseline). With that achievement, Keyera has reaffirmed its commitment to operational efficiency and responsible energy development.

Growth Projects and Future Guidance

Keyera’s major growth initiatives remain on track. Following are the company’s key projects over the coming years:

• KFS Frac II Debottleneck – Scheduled for mid-2026 completion, the 8,000-barrel-per-day project proceeds on time and on budget, with an expected cost of around $85 million.
• KFS Frac III Expansion – Set to add 47,000 barrels per day of fractionation capacity by mid-2028, the project’s total cost is estimated at $500 million.
• KAPS Zone 4 – This 85-kilometer pipeline extension from Pipestone to Gordondale is anticipated to be in service by mid-2027. The net cost to Keyera is approximately $220 million.

As for capital expenditures, Keyera has modified its 2025 growth capex to $220 million-$240 million, citing a shift of some spending to 2026. Maintenance capital has also been adjusted to $60 million-$70 million, while cash taxes are now expected at $90 million-$100 million.

Looking ahead to 2026 before the Plains acquisition, Keyera projects continued fee-based growth of 7%-8% annually from 2024 to 2027. Major turnarounds, such as a planned six-week outage at the AEF facility, are included in the higher maintenance budget for 2026. Once the acquisition closes, further guidance and a comprehensive outlook for the combined platform will be provided.