01—Abstract
Summary
Summary of the 8-K filed May 12, 2026. Cited figures are marked; the original filing is the authoritative source.
Plains All American Pipeline, L.P.
(Nasdaq: PAA) reported on May 12, 2026 that it completed the previously announced sale of Plains Midstream Canada ULC, the subsidiary owning substantially all of its natural gas liquids (NGL) business, to Keyera Corp. The sale was made under a Share Purchase Agreement dated June 17, 2025, as amended. The Seller received cash consideration of approximately CAD $5.13 billiona (approximately USD $3.76 billion), subject to post-closing adjustments. Net proceeds of approximately $3.3 billion, after taxes and expenses, will be used to reduce leverage, including repaying commercial paper borrowings, the term loan, and the 4.50% senior notes due December 2026, and for other general partnership purposes.
PAA also disclosed that the sale closing triggers mandatory prepayment of its $1.1 billionb senior unsecured term loan, which was funded December 1, 2025, within seven business days of closing. PAA intends to terminate the Term Loan Agreement effective May 14, 2026 and repay all outstanding amounts. Transition services agreements between PAA and Keyera were entered into to support the transition of the business.
In its accompanying press release, Plains said the sale completes its transformation into a pure play crude oil midstream company and expects its leverage ratio to trend toward the middle of its targeted range of 3.25 to 3.75xc. Plains does not anticipate paying a special distribution, as the tax liability to unitholders from the divestiture is expected to be mitigated by bonus depreciation from the Cactus III acquisition. The NGL business is presented as discontinued operations in PAA's prior financial statements.
02—Key points
Key Highlights
- Closed the sale of Plains Midstream Canada ULC, which owns substantially all of PAA's NGL business, to Keyera Corp. on May 12, 2026.
- Cash consideration of approximately CAD $5.13 billion (approximately USD $3.76 billion), subject to post-closing adjustments.
- Net proceeds of approximately $3.3 billion after taxes and expenses, earmarked to reduce leverage, including repaying commercial paper, the term loan and the 4.50% senior notes due December 2026.
- The $1.1 billion term loan triggers mandatory prepayment within seven business days of closing; PAA intends to terminate the Term Loan Agreement effective May 14, 2026.
- Leverage ratio expected to trend toward the middle of the targeted range of 3.25 to 3.75x.
- No special distribution is anticipated, as unitholder tax liability from the divestiture is expected to be mitigated by bonus depreciation from the Cactus III acquisition.
- Management describes the company as now a pure play crude oil midstream business, with expected benefits of less commodity price volatility, reduced maintenance capital and lower corporate taxes.
03—Questions
Frequently Asked Questions
What did Plains All American Pipeline sell, and to whom?
PAA sold all outstanding shares of Plains Midstream Canada ULC, the subsidiary that owns substantially all of its natural gas liquids (NGL) business, to Keyera Corp., an Alberta corporation, under a Share Purchase Agreement dated June 17, 2025, as amended.
How much did PAA receive and how will the proceeds be used?
The Seller received cash consideration of approximately CAD $5.13 billion (approximately USD $3.76 billion), subject to post-closing adjustments. Net proceeds of approximately $3.3 billion after taxes and expenses will be used to reduce leverage, including repaying commercial paper borrowings, the term loan and the 4.50% senior notes due December 2026, and for other general partnership purposes.
What happens to the $1.1 billion term loan?
The sale closing triggers mandatory prepayment of all amounts outstanding under the term loan within seven business days. PAA intends to terminate the Term Loan Agreement effective May 14, 2026 and repay all amounts outstanding.
Will unitholders receive a special distribution?
No. Plains does not anticipate paying a special distribution following the closing, as the tax liability to unitholders resulting from the NGL divestiture is expected to be mitigated by bonus depreciation from the Cactus III acquisition.
How does the sale change PAA's business profile and leverage?
Management says the sale completes PAA's transformation into a premier pure play crude oil midstream company, with more durable business, less commodity price volatility, and free cash flow supported by reduced maintenance capital and lower corporate taxes. Post closing, Plains expects its leverage ratio to trend toward the middle of its targeted range of 3.25 to 3.75x.
04—Continue