Keyera’s Q1 2026 report and conference call on May 14 provided updates on projects already underway, the re-start of its iso-octane facility, and some color on longer-term growth opportunities.
The Alberta EnviroFuels iso-octane (AEF) facility, which typically consumes 25-30 Mb/d of butane but has been down since January, is expected to be back up and running by the end of May. Keyera noted that after a detailed review of the operation plan for the facility, it now plans to supplement the existing four-year major turnaround cycle with a smaller plant outage or “pit-stop” in between. Regarding its octane business, Keyera sees increasing demand from some of its customers (presumably Washington State refineries) that may be growing production to feed more gasoline into California, given the refining capacity that has been shut down there, while in Asia it is seeing some of the naphtha crackers, which produce octanes among other products, getting shut down and displaced by crackers that take a lighter end feedstock.
Regarding the acquisition of Plains Midstream’s Canadian NGL business, which closed on May 12, Keyera noted it is seeing “great opportunities beyond the CAD$100 million” annual synergy estimate, for example opportunities to reduce the number of railcars leased. On May 5 Keyera disclosed that Canada’s Commissioner of Competition had filed an application with the Competition Tribunal in connection with the Plains acquisition. Keyera has 45 days to file its response, after which the Commissioner can reply. The schedule for the proceeding will then be established. This process could take a number of months. Keyera plans to issue refreshed guidance in mid to late June, which will include forecasts for the Plains assets recently acquired.
The Keyera Fort Saskatchewan (KFS) Fractionator II debottleneck (+8 Mb/d) remains on schedule for complete by the end of June, but is now expected to be below budget. The KFS Fractionator III project (+47 Mb/d, mid-2028 start-up) and the KAPS Zone 4 project (an extension of the KAPS NGLs pipeline, mid-2027 start-up) are both progressing on time and on budget.
Operationally, Keyera saw better results from its Southern gas plants in Q1 2026, where volumes were up 4% year-over-year, thanks to increasing production from the Duvernay.
Beyond its growth projects currently underway, it sees potential opportunities for additional gas gathering and processing and NGLs, given the multitude of crude oil pipeline expansion projects being proposed that would facilitate growth in bitumen production and the need for condensate as diluent, as well as indications that LNG Canada Phase 2 may be sanctioned later this year. Keyera noted that roughly two-thirds of the condensate/diluent that flows up to the oil sands region comes off Keyera’s system.
