Topics Du Jour - KEY Sanctions ACE Rail Terminal, ENB AGT Expansion Open Season

Research evidence excerpt

Topics Du Jour - KEY Sanctions ACE Rail Terminal, ENB AGT Expansion Open Season

Canada | Midstream EquityMayResearch20, 2026

KEY STOCKS FEATURED INCLUDE:Topics Du Jour - KEY Sanctions ACE Rail

TICKER RATING PRICE TARGETTerminal, ENB AGT Expansion Open Season

KEY CN BUY C$65.00

KEY's ACE rail terminal should lower transport costs out of KFS. While likely not

the highest return project off the bat, expansions could lower the build multiple

over time. ACE could also bolster fee-based EBITDA, further supporting the new

CAGR guide next month. Elsewhere, ENB launched an open season for Project

Beacon, its larger AGT expansion. While very early in a complex process, Beacon

could indicate whether New England's gas stance has truly changed.

KEY's ACE Rail Terminal Should Bolster Fee-Based EBITDA (Lower Transport Costs): Wednesday

morning, KEY sanctioned the Alberta Corridor Export (ACE) Rail Terminal. The C$240mn project

(C$100mn to be spent in '26) will lower transport costs since it allows for unit trains to be loaded

immediately near the KFS complex, getting LPGs onto CN's line and out to ALA's RIPET/REEF export

facilities more efficiently. ACE will support 45 mbpd of rail loadings, with ALA likely taking a portion

of that within its existing commercial arrangements with KEY. We suspect ACE will fall toward the

lower end of KEY's targeted 10-15% rate of return range (we estimate a ~9x build multiple, or C

$25-30mn of EBITDA). However, the terminal will be scalable, and future expansions should be

more capital efficient. The expected mid-'28 in-service aligns with start-up of KFS III. The margin

contribution should fall within KEY's Liquids Infra segment, though KEY's Marketing arm will be

able to utilize the enhanced loading capability.