As it readies an expansion of its Alberta natural gas liquids (NGL) facility, Houston-based Plains All American has agreed to sell its 21% ownership in the Keyera Fort Saskatchewan (KFS) project to operator Keyera Corp. for C$365 million ($270 million).

The transaction, subject to Canadian Competition Bureau review and closing conditions, is set to be completed in early 2023. The divestiture includes all of Plains’ interest in KFS. 

The “win-win announcement allows us to monetize our 21% ownership of the KFS joint venture, while improving key connectivity for our Plains Fort Saskatchewan facility,” CEO Willie Chiang said. “The sale proceeds will be utilized to further lower our leverage, strengthen our financial positioning and potentially reinvest in capital-efficient expansions and improvements at the Plains Fort Saskatchewan facility.”

Under the agreement, Plains would maintain its current customers and contracts, as well as lease back fractionation and storage capacity at the Keyera facility, for several years.

Plains and Keyera also agreed to improve the long-term NGL connectivity between their respective assets in the region.

In September, Keyera said it planned to “significantly expand capacity” at KFS. The storage expansion project would include mining of four underground storage caverns and constructing a brine pond.

When completed, Keyera said the project would add 3 million bbl of storage capacity for condensate, propane, butane and other hydrocarbons. Overall storage capacity at KFS is expected to increase by 37%.

Meanwhile, Plains’ Fort Saskatchewan facility near Edmonton is considered one of the key North American NGL hubs. Management also is evaluating an NGL expansion of the facility.

Plains’ primary assets now include two fractionation trains with a combined design capacity of 85,000 b/d. The facility is able to produce propane, butane and condensate, as well as transport a propane and butane mix to Plains’ Sarnia facility for further fractionation.