Keyera Buys Out Stonepak's Half of KAPS Gas Pipeline for C$1.2B

Keyera took full ownership of the KAPS natural gas pipeline Wednesday. The Calgary-based midstream company paid C$1.215 billion to buy the remaining 50% non-operating stake from investment firm Stonepak Partners.

The deal gives Keyera complete control over the 575-kilometre system. KAPS moves natural gas and natural gas liquids from the Montney formation in British Columbia to fractionation and storage hubs near Edmonton. Keyera already operated the pipeline under a joint venture structure with Stonepak. Full ownership eliminates the governance and cost-sharing layers that came with the partnership.

Keyera funded the purchase with cash on hand and a C$600 million draw from its credit facilities. The company said the acquisition is immediately accretive to distributable cash flow per share. Keyera did not disclose the exact accretion range.

The pipeline started commercial service in December 2023. It has capacity to move about 250,000 barrels per day of NGLs, with further expansion options. Stonepak acquired its stake in 2022 after the project was already under construction, a typical private-equity entry into large infrastructure. The exit gives Stonepak a realized return after holding the asset for roughly three years.

For Keyera, the move consolidates a strategic asset in the Montney corridor. The region produces more natural gas and NGLs than existing infrastructure can process without congestion. Keyera also operates two gas plants and a fractionator in the same area. Owning the entire pipeline lets the company align throughput allocation with its own processing volumes, capturing a wider share of the value chain.

Keyera shares traded at about C$42.50 in Toronto on Wednesday, up slightly on the news. The stock has gained 11% over the past 12 months, roughly in line with the S&P/TSX energy index.