A Keyera Corp. facility in Alberta.Supplied
Ask Keyera KEY-T CEO Dean Setoguchi if the Alberta oil patch is back to normal after the crude-oil price collapse in 2014-15 and the COVID-19 pandemic in 2020 and 2021, and he laughs and says, “I don’t know if there’s ever a normal.”
Industry veterans in Calgary deal with upheavals almost all the time, and Keyera has put some impressive numbers on the board. Revenue has almost tripled since dipping to $2.5 billion in 2015 and 2016, Keyera maintained its dividend and has increased it (from $1.26 per share a year in 2014 to $2.08 now), and after the company’s share price plunged to a pandemic low of less than $15 in early 2020, it’s traded just above $40 lately—near its pre-collapse records.
As Setoguchi explains, much of Keyera’s success is based on picking the right targets—including where in the West to operate and what businesses to be in. For non-energy specialists, Keyera is a midstream operation—not extracting oil and gas itself (upstream) or selling gasoline or other retail products (downstream). Spun out of Gulf Canada Resources in 1998, Keyera went public during the Alberta income trust boom in 2003.
Setoguchi, now 58, was born and raised in Lethbridge, Alta., and earned an accounting degree there. He joined Keyera as CFO in 2008 and worked his way up to CEO in 2021. He loved the entrepreneurial spirit of the boom. “There were hundreds of companies,” he says. Now, there are much fewer.
Keyera has three main lines of business: gathering and processing natural gas from producers through a network of pipelines and plants; liquids infrastructure, which involves producing and storing natural gas liquids (NGLs); and marketing, which Setoguchi says is basically buying NGLs from Keyera’s system and “building a margin in between.” Products the company sells include propane, condensate (which allows thick oil sands crude to flow through pipelines), butane and iso-octane (used in high-octane gasoline).
Being mid-size helps Keyera stay nimble. “A $100-million project still means something to us,” Setoguchi says. And the company has expanded in the fast-growing Montney and Duvernay regions in recent years. It aims to grow its earnings before interest, taxes, depreciation and amortization at a compound annual rate of 7% to 8% from 2024 to 2027.
Setoguchi also thinks a lot about the role natural gas and natural gas products should play in our energy mix. “We should really be focusing as a nation to help supply the world,” he says, “and lower the dependence on higher-carbon-emitting forms of energy like coal.”
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