Plains All American Pipeline LP Sells NGL Business for $5.15 Billion

By Philip Seaworth • Wednesday, June 18 10:18 • Permanent Link

Plains All American Pipeline, L.P. (NASDAQ: PAA) and Plains GP Holdings (NASDAQ: PAGP) have announced the execution of definitive agreements with Keyera Corp. (TSX: KEY) for the sale of substantially all of its NGL business for a total cash consideration of approximately $5.15 billion CAD ($3.75 billion USD). The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions, including regulatory approvals.

The benefits of the transaction include a premier midstream crude oil "pure play," a more durable cash flow stream, an attractive valuation representing approximately 13x expected 2025 distributable cash flow (DCF), an enhanced free cash flow profile, and significant financial flexibility.

The proceeds from the transaction are expected to be approximately $3.0 billion USD net after taxes, transaction expenses, and a potential one-time special distribution. The company plans to continue executing on its long-term capital allocation framework, prioritizing proceeds toward disciplined bolt-on M&A, capital structure optimization, and opportunistic common unit repurchases.

Plains All American's Chairman and CEO, Willie Chiang, stated, "Today’s announcement is a win-win transaction for both Plains and Keyera. Plains is exiting the Canadian NGL business at an attractive valuation while Keyera is receiving highly complementary and critical infrastructure in a strategic market. Successful completion of this transformative transaction advances our efficient growth strategy and establishes Plains as the premier pure play crude oil midstream entity with highly strategic assets."

The closing of the transaction is expected to result in a flow-through of taxable income to the holders of PAA common units and impact the taxability of distributions to the holders of PAGP class A shares. The company estimates that it will incur approximately $360 million USD of entity-level taxes payable in Canada associated with the sale of the NGL business and the restructuring of its remaining Canadian crude assets.

As of June 30, 2025, Plains will re-classify the NGL assets associated with the transaction as discontinued operations. For further details on the transaction, a presentation has been posted to the Plains investor relations website at ir.plains.com. Today the company's shares have moved -0.67% to a price of $17.74. Check out the company's full 8-K submission here.

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