M&A in Canadian oil and gas accelerating: ‘We see a lot of consolidation’ says Keyera CEO

Keyera Corp. chief executive Dean Setoguchi speaking at Keyera’s Fort Saskatchewan Condensate System site, 2023. Photo by David Bloom/Postmedia files

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Merger and acquisition activity in Canadian oil and gas accelerated in the first half of the year, with a major deal announced this week by Calgary-based pipeline company Keyera Corp. forming part of a wave of consolidation that observers say is underway in the oilpatch.

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After more than a decade of jealously eyeing Plains All American Pipeline LP’s natural gas liquids (NGL) business in Canada, Keyera finally succeeded in landing a deal with the Houston-based midstream company.

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On Friday, Keyera said it had successfully closed an equity raise to fund the $5-billion deal for Plains’ large-scale NGL plants, pipelines, storage and rail terminals in Alberta, Saskatchewan, Manitoba and Ontario.

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“This was always No. 1 on our list,” Keyera chief executive Dean Setoguchi said. “We tried to approach Plains over this opportunity many times, but they refused to even engage in any kind of discussions.”

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Keyera bided its time, growing into one of the country’s largest midstream operators focused on NGLs — the liquid byproducts made from natural gas, such as propane, butane and condensate — and becoming an international exporter earlier this year after securing tolling contracts with a West Coast terminal that provides access to Asian markets.

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Setoguchi said the company finally reached a “win-win” arrangement with Plains that has the American pipeline company sharpening its focus on crude oil south of the border, while Keyera expands its footprint of delivering Alberta’s NGL production both east and and west through major processing hubs in Alberta to a key storage and fractionation terminal in Sarnia, Ont., serving Canadian and United States Midwest customers.

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“What we’re seeing in our industry is we see a lot of consolidation and some of that is (because) size and scale matter,” Setoguchi said. “It’s really to drive efficiencies and create a more competitive platform, and that’s exactly what this accomplishes.”

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M&A activity in the Canadian upstream sector accelerated in the first six months of 2025, according to data from energy research firm Enverus Inc., with a total deal value of around $13 billion, compared to about $18 billion for all of 2024 and $15 billion for 2023.

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Similarly, M&A activity in the Canadian midstream sector is up so far this year to around $6 billion — largely on the back of Keyera’s deal with Plains — compared to a total of $3 billion in 2024 and $4 billion in 2023, Enverus said.

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Much of the dealmaking so far this year has been through stock-for-stock swaps, where a company buys another using its own shares instead of cash, said Enverus principal analyst Andrew Dittmar.

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That approach was used in the $15-billion merger between Whitecap Resources Inc. and Veren Inc. and it avoids the difficulty of valuing energy companies during a particularly volatile period for oil and gas prices.