Keyera Announces Sanctioning of KAPS Zone 4 and Provides Other Commercial Updates

Globe and Mail

09-06-2025

CALGARY, AB , /CNW/ - Keyera Corp. (TSX: KEY) ("Keyera") announced today the formal sanctioning of KAPS Zone 4, a strategic extension of its integrated system. This expansion strengthens Keyera's connectivity to the growing liquids-rich Montney regions of northeast British Columbia and northwest Alberta , some of the most active and resource-rich areas in North America .
"The sanctioning of KAPS Zone 4 marks another important milestone in the execution of our strategy to grow and extend our value chain," said Dean Setoguchi , President and CEO. "This project reflects strong customer demand for our fully integrated service offerings and our ability to connect to valuable end-markets. By enhancing connectivity and optionality, Zone 4 strengthens our competitive position and delivers greater value to our customers."
KAPS Zone 4 is an 85-kilometre extension of the existing KAPS pipeline, connecting Pipestone to Gordondale, Alberta . It will connect to NorthRiver Midstream's Northeast BC Connector project. Together, these systems offer Montney producers a fully integrated and cost-effective route from northeast British Columbia to Fort Saskatchewan area fractionation and Keyera's industry-leading condensate hub. The capital cost of KAPS Zone 4 is expected to be $220 million (net to Keyera), which includes investments in additional pumping capacity on KAPS Zones 1 to 3. The project is targeted to enter service in mid-2027.
The project is backed by long-term transportation agreements with several investment-grade Montney producers, averaging 11 years in duration and 75% take-or-pay commitments. The agreements include downstream services such as fractionation, storage, transportation, and marketing, further demonstrating the value of Keyera's integrated offering.
Keyera has secured over 75,000 barrels per day of new contracted volumes across KAPS Zones 1 through 4 in recent months, with substantially all volumes also committed to incremental downstream services.
Keyera's current and future fractionation capacity, which includes the Fort Saskatchewan Fractionation Unit II debottleneck and the Fort Saskatchewan Fractionation Unit III expansion project, is now substantially fully contracted, supporting strong utilization and returns across the system.
Investments in Zone 4 and fractionation expansions directly contribute to the growth of Keyera's long-term, fee-for-service cash flows, supporting continued sustainable dividend growth.
In response to growing volumes across Keyera's integrated system, Keyera has entered into an agreement with AltaGas to export an additional 12,500 barrels per day of natural gas liquids via AltaGas' west coast export facilities starting in 2028. This builds on the 12,500 barrels per day announced earlier this year. The agreement will further strengthen Keyera's ability to offer its customers more diversified market access for LPGs, including premium Asian markets, while providing AltaGas with long-term ratable export volumes and cash flows.
About Keyera Corp.
Keyera Corp. (TSX: KEY) operates an integrated Canadian-based energy infrastructure business with extensive interconnected assets and depth of expertise in delivering energy solutions. Its predominantly fee-for-service based business consists of natural gas gathering and processing; natural gas liquids processing, transportation, storage and marketing; iso-octane production and sales; and an industry-leading condensate system in the Edmonton / Fort Saskatchewan area of Alberta . Keyera strives to provide high quality, value-added services to its customers across North America and is committed to conducting its business ethically, safely and in an environmentally and financially responsible manner.
Forward-Looking Statements
This news release contains certain statements that constitute forward-looking information within the meaning of applicable Canadian securities legislation (collectively, "forward-looking information"). Forward-looking information is typically identified by words such as "anticipate", "expect", "may", "will", "can", "should", "would", "plan", "intend", "believe", "target", and similar words or expressions, including the negatives or variations thereof. All statements other than statements of historical fact contained in this document are forward-looking information including, without limitation, statements regarding the cost and timing of the KAPS Zone 4 project; the impact of this project on Keyera's stand-alone project return on capital target; the results of additional contracting discussions with third parties and the expected impact on future volumes on KAPS; and expectations around the impact of the agreement with AltaGas on market access.
All forward-looking information is based on a number of risks, expectations, assumptions and uncertainties that Keyera has used to develop such information, but which may prove to be incorrect. Such risks, expectations, assumptions and uncertainties include, without limitation, general industry, market and economic conditions; activities of customers, producers and other facility owners; actions by joint venture partners or other partners which hold interests in certain of Keyera's assets; counterparty performance and credit risk; reliance on third parties; actions by governmental authorities; and the ability to obtain regulatory, stakeholder and third-party approvals. Further information about the factors affecting forward-looking information and management's assumptions and analysis thereof, is available in Keyera's Management's Discussion and Analysis for the year ended December 31, 2024 and in Keyera's Annual Information Form available on Keyera's profile on SEDAR+ at www.sedarplus.ca. While Keyera believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because Keyera can give no assurance that such expectations will prove to be correct.
Readers are cautioned that the foregoing list of important factors is not exhaustive, and they should not unduly rely on the forward-looking information included in this press release. Further, readers are cautioned that the forward-looking information contained herein is made as of the date of this press release. Unless required by law, Keyera does not intend and does not assume any obligation to update any forward-looking information. All forward-looking information contained in this press release is expressly qualified by this cautionary statement.
Additional Information
For more information about Keyera Corp., please visit our website at www.keyera.com or contact:
Dan Cuthbertson , General Manager, Investor Relations
Katie Shea , Senior Advisor, Investor Relations