The regulator said Tuesday it has applied to the Competition Tribunal to challenge the deal announced last June. The tribunal, similar to a court, acts independently from the bureau.

At the heart of the issue is the position both companies have at Canada's main natural gas liquids processing hub in Fort Saskatchewan, Alta., northeast of Edmonton. There, valuable liquids like butane and propane are separated out of natural gas streams, creating high-value fuels and feedstocks used in agriculture and petrochemicals.

"We found that the transaction would eliminate Plains as an independent competitor at the hub and reduce the number of major integrated providers from three to two. That loss of competition matters," Anthony Durocher, acting senior deputy commissioner of the bureau's mergers and monopolistic practices branch, told reporters.

"Our analysis indicates that removing Plains as an independent competitor would likely lead to higher prices and less favourable contract terms for producers that rely on services, along with reduced incentives to invest over the long run."

The remaining natural gas liquids competitor at the hub would be Pembina Pipeline Corp.

Durocher said for many producers "there is simply no substitute" for Fort Saskatchewan and the barriers to entry for a new competitor are high, given the costs, long timelines, regulatory requirements and geological constraints.

The assets to be acquired include 193,000 barrels per day of "fractionation capacity," where gas and liquids are separated, as well as 23 million barrels of storage capacity and more than 2,400 kilometres of pipeline infrastructure.

In an interview at the time of the announcement, Keyera CEO Dean Setoguchi called it a "great Canadian story," as much of the cash Plains had generated from its operations in Canada flowed to the U.S.

"With this acquisition, it will be in the hands of a Canadian company and their Canadian management and board," Setoguchi said.

Keyera said Tuesday that the regulatory proceeding does not prevent it from closing the transaction.

"The company disagrees with the commissioner's assertions and characterization of the transaction, and intends to respond to the application," Keyera said in a news release.

"As the company has previously advised, the transaction will strengthen competition across the basin and provide customers with improved access to key markets and greater flexibility in how their products are handled, transported and sold."

Durocher said if the deal is consummated and the tribunal later sides with the Competition Bureau, remedies could include unwinding the transaction or ordering certain assets to be divested. Tribunal decisions can be appealed in Federal Court.

This report by The Canadian Press was first published May 5, 2026.

Companies in this story: (TSX:KEY)