Keyera Posts Record Liquids Margins, Plots AEF Overhaul

Adjusted EBITDA of CAD 466 million and a record CAD 272 million liquids infrastructure margin put Keyera Corp. (TSX:KEY) ahead of plan in the third quarter of 2026, as the newly acquired Plains assets contributed for a full quarter and executives moved to fix lingering reliability problems at the AEF isooctane facility. The quarter still produced a net loss of CAD 68 million, Chief Financial Officer Eileen Marikar said.

Distributable cash flow reached CAD 247 million, or CAD 0.84 per share, excluding transaction and integration costs tied to the Plains deal. President and CEO Dean Setoguchi said the acquired assets are performing ahead of expectations, with major growth projects on schedule and at or below budget.

How much did the Plains assets deliver?

Plenty, and faster than modeled. Liquids infrastructure realized margin hit its record CAD 272 million on a full quarter of Plains contributions plus Keyera's additional 50% interest in the KAPS pipeline and strong throughput. Gathering and processing realized margin came in at CAD 125 million, with the Wapiti and Simonette facilities approaching full operating capacity, Setoguchi said.

Marketing realized margin was CAD 95 million. Marikar said results felt the pinch of the previously disclosed disruption to Enbridge's Line 5 system and lower utilization at AEF, partly offset by stronger isooctane pricing and butane sales.

The synergy numbers moved quickly. Brad Slessor, senior vice president of gathering and processing and NGL pipelines, said Keyera had delivered CAD 115 million in run-rate synergies by the end of September — against a target of CAD 120 million to CAD 140 million within 12 months of the May 2026 closing. Setoguchi added that the acquired business is also producing higher volumes and liquid yields than Keyera had modeled, alongside capital savings and potential investments that sat outside the original deal thesis.

What happens at AEF?

Two outages, one permanent fix. Keyera expects an approximately four-week outage at AEF in early January to repair a heat exchanger whose performance has deteriorated faster than expected. Permanent replacement equipment is scheduled for installation in May 2027, with full production resuming by the end of that month.

Jamie Urquhart, senior vice president of the liquids business unit, said the January work should bring the facility close to or at full capacity initially, though the exchanger's effectiveness will likely decline again before the permanent swap. The replacement will use a design that ran reliably at the site for more than 25 years, he said.

Keyera has also changed how it runs the plant. Urquhart said the company has shifted away from maximizing short-term production toward defined reliability parameters and more frequent planned maintenance. Work previously proposed for 2028 moves into the May outage, aimed at avoiding another stoppage that year.

Where does guidance stand now?

Higher on marketing, unchanged on growth capital. Keyera raised its 2026 marketing realized margin guidance to CAD 400 million to CAD 430 million, reflecting stronger-than-anticipated isooctane and butane contributions plus roughly CAD 50 million in incremental benefits from revaluing inventory and related hedges tied to the Plains acquisition, Marikar said. The company lifted expected 2026 maintenance spending by CAD 20 million to CAD 260 million to CAD 280 million and forecast cash taxes of CAD 55 million to CAD 75 million.

For 2027, guidance includes:

• Growth capital of CAD 630 million to CAD 670 million, primarily for projects already underway
• Maintenance capital of CAD 250 million to CAD 280 million, including about CAD 20 million for the AEF equipment replacement and CAD 20 million for one-time IT integration projects
• Cash taxes of CAD 130 million to CAD 150 million
• 2027 marketing margin guidance to come in May alongside first-quarter results, assuming AEF operates as expected for the rest of the year

What about leverage and expansion?

Net debt to adjusted EBITDA stood at roughly 3.6 times at quarter-end. Marikar said leverage should peak at year-end and return to the company's long-term target range in 2028, as major project spending declines and completed projects add earnings.

On the growth side, Keyera plans to lift capacity on its Fort Saskatchewan condensate system by about 15% through a debottlenecking project entering service early in 2027. Urquhart said the added capacity is essentially contracted, and talks are underway with major oil sands producers on a further expansion. In the north, Slessor said potential debottlenecking projects at Wapiti and Simonette are in the works as customer demand nears available capacity, with more detail promised next year.