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The Competition Bureau has taken a step forward in its investigation into whether a natural gas acquisition by Calgary-based Keyera Corp. will substantially lessen competition or raise barriers to entry in Canada’s oil and gas industry.
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The bureau obtained a federal court order to gather information from a third player in Canada’s oil and gas industry, Inter Pipeline Ltd., as it digs into Keyera’s proposed acquisition of the Canadian natural gas liquids business of Plains All American Pipeline LP, a United States-based midstream energy business with operations in Alberta, Saskatchewan, Manitoba and Ontario.
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The court order requires Inter Pipeline, which is owned by Brookfield Infrastructure Partners LP, to produce records and information that are relevant to the bureau’s investigation.
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Inter Pipeline is involved in natural gas liquids processing in Western Canada in addition to other operations that include pipelines, oil sands transportation and bulk liquid storage in Europe. Acquired by Brookfield in 2021, Inter Pipeline had acquired two liquids extraction plants near Fort McMurray in 2016 along with an fractionator in Alberta used to separate natural gas liquids into marketable produces sold across North America.
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Natural gas liquids are byproducts of natural gas production and are used to heat homes, dry crops and manufacture petrochemicals such as propane and butane. They can also be blended with crude oil to improve pipeline flow.
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Last June, Keyera announced a $5.15 billion deal to acquire substantially all of Plains’ Canadian natural gas liquids (NGL) business along with select U.S. assets. The company said the transaction would enhance domestic energy infrastructure and energy security, support economic resilience and establish a strong cross-Canada NGL corridor.
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In a news release Wednesday, the Competition Bureau said it probing whether Keyera’s planned acquisition, if completed, would entrench Keyera’s competitive position in the energy infrastructure marketplace or raise barriers to entry for new market entrants.
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The bureau highlighted its interest in Fort Saskatchewan, Alberta, which is a key hub for natural gas liquids in Canada. About 87 per cent of all fractionation activity in Alberta — the process in which natural gas is separated into district products — occurs in and around Fort Saskatchewan.
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In 2022, Keyera announced an agreement to boost its stake in Keyera Fort Saskatchewan to 98 per cent from 77 per cent by buying a 21 per cent working interest from Plains Midstream Canada for $365 million.
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In addition to Keyera’s Canadian operations, the company operates in Oklahoma.
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