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Good morning. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to Keyera's 2022 Year-End Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.
And I would now like to turn the call over to Mr. Calvin Locke, Manager of Investor Relations. You may begin.
Thank you, and good morning. Joining me today will be Dean Setoguchi, President and CEO; Eileen Marikar, Senior Vice President and CFO; Jamie Urquhart, Senior Vice President and Chief Commercial Officer; and Jared Beztilny, Senior Vice President, Operations and Engineering. We will begin with some prepared remarks from Dean and Eileen, after which we will open the call to questions.
I would like to remind listeners that some of the comments and answers that we will give you today relate to future events. These forward-looking statements are given as of today's date and reflect events or outcomes that management currently expects. In addition, we will refer to some non-GAAP financial measures. For additional information on non-GAAP measures and forward-looking statements, please refer to Keyera's public filings available on SEDAR and on our website.
With that, I'll turn the call over to Dean.
Thanks, Kelvin, and good morning, everyone. Dara delivered outstanding results in 2022, generating more than $1 billion in annual adjusted EBITDA for the first time in our history. This result was driven by a record gathering, processing and marketing contributions and solid liquids infrastructure performance.
We saw 8% year-over-year volume growth in our G&P business as customers remain in a strong financial position, while continuing to take advantage of attractive economics in our capture areas. Our Alberta and Biofuels team delivered record run time before taking the facility offline the fall to complete a 6-week planned turnaround. AEF's strong performance helped drive a record marketing year and the success of this turnaround will support continued high performance from this facility. We're well positioned to continue to earn strong results for shareholders as we execute our strategy by leveraging our integrated value chain to support continued basin growth.
We have several recent notable achievements. First, we're expanding our Pipestone gas plant. This project is supported by long-term take-or-pay agreements. It increases our capacity by 40 million cubic feet per day and is expected to be completed in the first quarter of 2024. Secondly, we acquired additional capacity at our core KFS complex. The acquisition closed this week and added significant fractionation, de-ethanization, storage and pipeline capacity while eliminating new build risk in an inflationary environment. The immediate addition of capacity in a high-demand frac market strengthens our ability to add incremental volumes and long-term contracts across our value chain, including caps. Thirdly, we progressed caps towards completion and line fill is underway. CAPS is now 99% complete, and we're on track to bring the pipeline into service in the second quarter.
Our final cost estimate remains unchanged at $1 billion net. With caps in service, Keyera can provide Montney and Duvernay producers a much-needed competitive alternative for all services from wellhead to end markets, including liquids transportation on a new pipeline. With fully integrated assets, we can better compete for volumes that earn full value chain returns. KAPS has been years in the making, and it's a platform that propels us forward on what we do best, delivering value for customers and shareholders.
In the past -- in the last 5 years, we have invested significantly to establish a footprint in the Montney and strengthen our integrated value chain. Projects like Wapiti, Pipestone CAPs and the recent KFS acquisition all contribute to high-quality fee-for-service cash flows. This supports our annual adjusted EBITDA growth rate of 6% to 7% from our fee-for-service business, laying the groundwork for future sustainable dividend growth.
Consistent with our Investor Day outlook last March, our go-forward capital allocation priorities are: first, to ensure continued financial strength, then debalance increasing returns to shareholders with future capital investments.
I'll now turn it over to Eileen to provide an update on Kura's financial performance for the quarter.
Thanks, Dean. Adjusted EBITDA was $212 million for the quarter and a record $1.03 billion for the full year compared to $294 million and $956 million for the same period last year. Results were driven by strong performance across our 3 business segments, including record contributions from G&P and marketing.
Distributable cash flow was $104 million for the quarter and $654 million for the full year compared to $207 million and $669 million for the same period in 2021. 2022 DCF was impacted by higher maintenance capital spending related to the AEF turnaround, which occurs once every 4 years. We recorded a net loss of $82 million for the fourth quarter and net earnings of $328 million for the full year compared to net earnings of $90 million and $324 million for the same period last year. The fourth quarter result was impacted by a $180 million noncash impairment charge, mostly related to the Fontana comp.
Terra continues to maintain a strong financial position, ending the year with net debt to adjusted EBITDA of 2.5x at the low end of our target range of 2.5x to 3x. This result includes the cash received from the equity funding completed in December to fund the KFS acquisition that closed in February. Moving to our guidance for 2023. Growth capital expenditures are now expected to range between $200 million and $240 million, excluding capitalized interest. This is up from the previous range of between $140 million to $180 million and is primarily related to cap spending deferred from 2022 to 2023.
Maintenance capital expenditures are expected to remain unchanged at between $75 million and $85 million. Consistent with prior year's annual marketing segment guidance will be provided with the first quarter results in early May after the conclusion of the NGL contracting season. Cash tax expense is now expected to be mill, down from the previous guidance of $10 million to $25 million. I'll now turn it back to Dean. Thanks, Aileen. Taris infrastructure will continue to play an important role, enabling basin growth. In 2022, our basin set new records for both natural gas and crude oil production and is positioned for continued growth in 2023.
Looking further ahead, we see energy security demand growth and energy transition as catalysts supporting long-term natural gas and natural gas liquids demand. On behalf of Keyera's Board of Directors and management team, I thank our employees, customers, shareholders, indigenous peoples and other stakeholders for their continued support.
With that, I'll turn it back to the operator for Q&A.
Thank you. [Operator Instructions] Your first question comes from the line of Rob Hope from Scotiabank.
First question is on caps now that we're seeing line fill in the projects under almost completion. Can you give us an update on your contracting efforts there, whether or not we've seen additional contracts added in recent months or not, we've seen a tone change just given that the project is almost in service as well as the fact that we have seen an operational incident on a competing pipeline.
Rob, it's Dean. Thanks for your question. Listen, I got to understand the significance of your question and wanting to get an update on that. We'll provide an update later this year. But I just want to make sure that we take a step. Did we get disconnected?
No, sir, you're still on the line; that comes from the line of Mr. Rob Hope. Should we move to the next question that calls on the line of Robert Kwan from RBC.
No. We can answer, Robert, those questions. We were just interrupted, so we didn't know if we got disconnected. So okay. Sorry, Rob. Again, let me just continue on. We'll provide an update later this year. But I just want to make sure we step back on the broader picture, and I'm sure you can appreciate that just given the situation that we're in and the sensitivity of contracts, we will wait a little bit later in the year to provide an update. And keep in mind that the other 50% of caps is yet to fully be completed here, which we would expect it's going to happen in the next few months. But Capstone will be in service soon as you heard. And the outlook for the basin has never been stronger. We -- when you look back to what we disclosed at Investor Day, we disclosed a 6% to 7% CAGR on our EBITDA. And in the near -- a lot of that's going to be driven by filling white space from assets that we've already made an investment in and just filling white space. But as you start to get out into 2024, 2025 and beyond, you're going to see cash flows continue to grow, and we're very confident about that. So we will provide an update later this year, but we feel very confident with where our contracting is going. Question -- that’s right, but you can go ahead.
So if I just think about your prior strategy was to finish up caps and then reuse CapEx generate a lot of free cash flow, get the balance sheet back in shape before taking on major growth. But you’ve had great performance. Marketing has been strong. So the balance sheet is leveraged at the low end of your target range. So are there things that you wanted to previously do that you felt you couldn’t that you can now take on from a growth perspective? Or should we still be thinking about just let the cash flow come on caps integrate that with the new capacity and CapEx should be relatively low for the next couple of years.
Thanks for the question, Robert. That is a good question. And when we think about our overall strategy, definitely, we see a lot of opportunity ahead. But where we are today is that this is a major project that we're putting into service. We finally have that fully integrated asset base. We can leverage a full service offering right from wellhead to end market. And so we see a lot of opportunities this year just to get the asset into service and to deliver on our cash flow growth, not only for this year, but to position ourselves for future years. Do we see more opportunities for growth beyond caps? Absolutely. But our primary focus this year, again, is balance sheet, just really making our assets wet and filling them up and again, continue to build that growth profile for the future as well.
If I can just finish with a question on the Pipestone expansion. I guess regards. First is just with the contracts, are those volumes flowing on the caps and into KFS. And then the second part is while this is a relatively small project, you've talked a lot at a high level about you're deploying capital. You want those long-term take-or-pay contracts covering your entire return. So just as it relates to this here, can you just talk about how much of the capacity is covered by take-or-pay contracts, what the average duration is? And what is basically the build multiple or the return just based on the long-term contracts in place.
Yes. I mean, listen, that's a great question, and we're very excited about the Pipestone expansion. And we don't speak specifically for obvious reasons about commercially sensitive transactions that we signed. But these are long-term contracts with high take-or-pay. And I can say generally that we have signed integrated deals associated with that incremental capacity. Which would be clear [ph].
So you've had that 10% to 15% target return. Is that entire return on the capital here being covered by the long-term contracts you have in place or do you need -- okay -- perfect.
Absolutely. It would be at the high end of our expectations.
Thank you. And your next question call from the line of Linda Ezergailis from TD Securities.
Can you help us understand with Zone for how that is looking? Any sort of updates on conversations there, activity, any sort of inflationary pressures? Any context you can provide would be appreciated.
Sure, Linda. I think that's a very relevant question, particularly when you consider the news with the Blueberry First Nations group and the 3D in BC, I think it's really encouraging overall. I think what we're seeing here is that it's positive because it's a collaborative decision to support future development in the area. And -- but there's still a lot of information that we still have to learn and start to be disclosed. So we wait for that. But overall, we think that it's positive for future development in BC and the possibility of Zone 4. When we think about the cost of Zone 4, I think there's -- we have a much better experience with our cap Zone 1 to 3. So we feel like the cost estimates and the experience that we have help us to better estimate what that cost is and also execute that project if we do choose to sanction it in the future.
The other thing I'd say is that there's a lot of large pipeline projects that are underway, and caps is one of them. But obviously, there’s Costa GasLink, there’s a lot of work being done on the NGTL system. There’s TMPL as well. But a lot of these projects will be completed in the next year, 1.5 years. So when you combine that with steel prices coming off, I think that there will be a better time for construction in the future. But -- but offsetting that, obviously, regulation is increasing. So I think what it also means is that the infrastructure that you have in the ground is only going to become more valuable over time. But overall, again, like I say, I think we’re excited with the progress of what we’re seeing in BC and the potential implications for Zone 4.
Thank you. And your next question comes from the line of Robert Catellier from CIBC Capital Markets.
I just wondered if you could give us some update on what you're seeing in terms of customer activity, both following the Blueberry River First Nation and agreement and also in light of the lower colony prices, in particular, natural gas.
Yes, that's a very good question, Robert. And overall, I mean, we saw tremendous growth in our basin for both crude oil and natural gas in 2022. And we believe that there's certainly room for growth in 2023. And the reason for that is the producers, at least in my 30-plus year career, I've never seen them in a stronger position that they're in today. Economics are still very strong. We know that there's going to be some more maintenance on TC systems. So we know that has -- could create some softness during periods of 2023 for AECO -- but overall, we think the environment is very positive. So what we're told from our customers is that they are going to continue to grow. In our capture areas, they see great economics, which is also good for our infrastructure. So we see continued growth based on macro factors and also the discussions we have with our customers.
Okay. And then just now that you’ve closed the KFS transaction, what operational and capital enhancements might you undertake and why…
Yes. Well, first of all, on CFS. We're very excited to have closed that transaction this week. If you ask the 2 previous CEO, Jim and Dave, they would say that they worked in that transaction for a long time, and so they're both very happy that we finally got it done. We see this as a fantastic opportunity because this is our core -- this is the nucleus of our whole NGL business. And to get a lot of extra capacity, especially for frac, which is very tight right now, but also deoptimization, we talked about storage and also the pipes that connect between Edmonton and Fort Saskatchewan. It's just super value to our business. And there's services that we can use to help leverage to provide more services across our whole integrated network, so -- and particularly on the frac.
So, now we're just going to make sure that we leverage the capacity that we acquired. But in the future, we certainly see a potential for a debottleneck at our -- the existing fact that we have. And longer term, there could be a Frac III. But in the short term, again, we're going to focus on maximizing the value of what we acquired and the debottleneck would be the next thing we look at.
Okay, that's helpful. Last question for me. Just a little curious on why the write-down of Simonet; it's clear the volumes have declined there over the last year or so, but only by about 12% and with caps coming on, it would seem to me that makes the plant a more attractive option for producers. So why the noncash write-down?
Yes. That's a very good observation, Rob. And you know what, I mean there's accounting standards, obviously, that we comply with. But I'll turn that over to Helen in just a minute, but I'd like to share maybe some of my perspectives first. I've never been more optimistic about the whole Montney fairway as I am today. And let me tell you why. When I think about just the future growth in our basin over the next 2 to 3 years, particularly with Kendall coming into service on the horizon, some more expansions on the NGTL system. We certainly see future basin growth. When you look at the Montney fairway and where it overlays with our capture area for Simonette, it's in a great area. And I certainly believe that the Montney, especially in that neck of the woods is still underdeveloped. We also see an emerging Duvernay play and which would be more -- a little bit more to the east of our Simonette gas plant. And the economics now in that player are very good, and that play is just emerging.
So to me, that's in the very, very early stages of development. When you also add that all up with a lot of land in that area has turned over in the last 2 years, including XTO's land position and shellfine position, which are huge land blocks where there was minimal development. So I think the activity in this area is going to be very robust for decades to come. But having said that, again, we comply with accounting standards. And let me turn it over to Arleen and she can speak to that in more detail.
Thanks, Dean. Rob, so as you can appreciate, we have long-term contracts in place at high fees to underpin capital. So as we see these contracts begin to roll off near the -- really the back end of the decade, the fees are expected to be lower. So again, as Dean mentioned, we see development and volume growth, but likely at lower fees than what we’ve seen through these long-term contracts. This is largely what drove the write-down for accounting poses.
Thank you. And your next question comes from the line of Andrew Kuske from Credit Suisse.
Dean, I think you mentioned Jim and David worked on the KFS deal for years. I guess you're sort of third time lucky on getting the deal over the goal line.
No luck.
Okay. Hard working for severance over all the years, but maybe if you could just talk a little bit about the frac dynamics you see on a go-forward basis because, obviously, the market is tight right now. There's one expansion project that's probably going to go ahead. You consolidated KFS and how do you think of the lay of the land in the frac market because you've got more gas production coming, more NGL production coming out of the ground. So how do you think of the lay of the land right now?
Yes. That's a great question, Andrew. And when I think about the frac dynamics, obviously, the market is very, very tight. And -- when I think back to just the NGL volumes in our basin, even going back to 2020, what surprised me is that dry gas dropped pretty dramatically. But if you look at the natural gas production, it remained relatively flat. And I think what that indicated is that a lot of the drilling really shifted to the liquids-rich drilling because it was more economic. So now that we've added a Bcf in a day, Bcf in half a day in the last year or so, obviously, there's just -- with that as a big influx of more NGLs. And you know what, there's some going to be some -- maybe some field frac projects where some of that will go maybe straight to end markets, whether that's the West Coast or local markets. But I think that the hub will always still be in Fort Saskatchewan. And obviously -- and we have a great position there with our CFS frac and storage site.
We're very happy, as I said before, about the acquisition that we made because that's capacity that we have available now. And we can use that in a very tight market, again, to leverage our entire integrated value chain to generate that broader cash flow stream. So I think that's a big advantage. And again, there's no execution risk on that incremental capacity. We think it's also a great opportunity that we think there's potential to do a debottleneck. And when you're debottlenecking, that has less risk as our engineering construction team tells me, less risk than doing a brownfield and obviously a greenfield development. So again, we see it as an incremental step to add more capacity with less execution risk. Longer term, again, we're as well positioned as anybody to add more frac capacity should the basin still need it with a third fractionator.
So again, overall, we're very well positioned, and we can do this all incrementally starting with the acquisition that we just closed this week.
I appreciate that color. And then maybe if I look across your portfolio, you've had some good evidence and examples over the years of partnering with others. So if you do decide to go build a new frac, is that sort of on the table, would you look to align with somebody else? -- and maybe lower the cost burden or the less capital cost burden in the front end and maybe someone else brings some other elements to the table that are just helpful for overall return profile.
Listen, we get asked that question a lot, mainly from people that want to partner with us on our CFS complex and add more capacity there. That’s our crown jewel. So I guess I’d never say never to anything. But if we did partner with something, they would have to bring a significant amount of value to the equation because that is a very high profit center for our company, and we won’t give that away to anybody unless again, they can bring something significant to the equation. Certainly, when we -- and maybe just lastly, when we look at our long-term forecast, we’ve been very clear that we want to have a self-funded program. We could certainly self-finance future frac expansions as are needed so with our cash flow. So again, we don’t see funding as a barrier to future growth at that complex -- thanks for your question.
And our next question comes from the line of Ben Pham from BMO.
I know you mentioned the Coastal GasLink. I'm wondering if you can maybe unpack potentially the benefit on your value chain? And how early do you think you can benefit from that? And do you expect to maybe have a greater share of the basin growth that you have had historically?
Yes, that's a great question, Ben. And I think it's a very exciting development for the whole basin. And when you think about Coastal GasLink and Canada LNG, I mean, this is something that has been talked about for a long time, but now we're getting towards the final stages where we can see visibility to when this is all up and running. And certainly, I guess the way I envision it is that a lot of the production in BC is going to flow to fill that 2 Bcf of initial demand. And a lot of it's going to be backfilled some of it's going to be in BC, some of it's going to be in Alberta. And when you have critical essential integrated infrastructure like ours it helps support that base in growth. And so we're going to benefit from those increased volumes across our entire integrated value chain. Jamie, do you have any other comments you want to add?
No. I just think, obviously, that project is good for the basin. And as the basin builds out, it's going to create opportunities for us downstream. And do you anticipate if -- let's say, you keep your market share you have today? Is this really an industry need to invest a next wave of CapEx in the infrastructure? Or do you think it's more real utilization moving up?
Well, I think certainly, with overall growth in the basin, we can help support that with capacity that we have already. And we certainly have more capacity at our gas plants. We saw some of that growth already over the last year. We had 8% year-over-year growth in our G&P business. And to us, I mean, that's the best long we can add because the capital is already deployed. So it's obviously just adding to our returns to our shareholders. On top of that, we have other -- I mean we have our cap pipeline that we're putting into service. And again, we think that we're going to benefit from a lot of future volumes that are going to come online for that system. It's going to feed our downstream business. So I think over time, as I said before, that likely that there will be more investment required more in Fort Saskatchewan, where a lot of the capacity is tighter there. But again, with the acquisition that we just made, we have still extra capacity on our pipes. We have [indiscernible] storage really in our DF as well. So we can support future growth in the basin. It's really the practice in the tightest demand.
And then beyond that, what we also see on the horizon is just more energy transition projects, and we're very excited about the future of our industrial heartland land, the 1,300 acres that we own there, and that's going to position us for future growth over the long term.
Okay, great. And then, maybe another topic I wanted to explore, you mentioned returns on capital and how it’s improved over the years. Can you share maybe -- I know Capes a little bit of work to go on ROC, but how should gas processing returns then is it in the right zone? And then the second part of that, I mean, my last question too is, you mentioned integrated return on capital. Are you more emphasizing that more an integrated return on capital versus how you looked at it more individually in the past?
Let me just maybe answer your second question, and then I'll turn the return of capital question back to Ilene. But as we said, we're extremely excited about our cap pipeline because -- this is the first time, especially in the Montney, where a lot of the basin growth is occurring today is that this will be the first time that we can offer that full integrated service. So obviously, we're jumping all over that. We see an opportunity with our gas plants, caps, frac storage, terminalling services and marketing services. So when we can just clip a few dollars all the way through our -- every time that molecule touches each part of our system, that's how we generate outsized returns for our shareholders. So again, this is why Capisso strategic for us. And again, we are excited that it's near completion. And commercially, yes, we have an opportunity to fully integrate our deals, and we are doing that today. So with that, I'll turn the first question over to Ilene.
Ben, yes, so in terms of return on capital for gas plant, I would really think about the new ones, right, really Wapiti and Pipestone -- and currently, our ROC on those investments are in the middle of that 10% to 15%. I think that's a really good range, and we see growth. So they are performing extremely well. And in terms of maybe that integrated ROC, we do disclose our return on invested capital, and it's -- I think it was 16% at the end of 2022. And that's really to show the value of all 3 of our segments, the gathering processing liquid plus our marketing, and that's how we're able to really generate best-in-class returns.
Okay, very helpful. Thank you.
Okay. And your next question comes from the line of Patrick Kenny from National Bank Financial.
Just on the higher throughput in the South region. I know your team has done a good job bringing in new volumes. But just with respect to the comment in the release where you see an opportunity to grow your operating margin. Just given, I'll call it, the normalizing natural gas price environment, curious what other factors might be helping to support not only higher producer activity in the area throughout the year, but also your margin expansion potential, even if gas prices don't strengthen from here.
Thanks for the question, Pat. I'll just turn that over to Jamie and he can provide more color on that one.
Yes, Pat. So thanks for the question, and it's a really good one. It's an exciting area for us. going back to sort of some of the themes that Dean has talked about earlier in the call is that these assets are in the right part of the basin. So like, I mean, what we found is that the returns that the producers that are drilling up wells in this area, they're best-in-class. And a lot of that's driven around the amount of liquids that we're seeing and the strength of those liquids prices as they're correlated to crude. So as you think about the economics and ultimately, the activity of facilities, it's just not all about natural gas prices. That's the first thing that I'd point out. So as we think about filling up those assets, like any supply-demand equation is that we look at the ability to be able to -- as contracts come off and Dean alluded to, a lot of stuff that we're doing, we'd like to think is good execution, not good fortune. But I'd say this is probably a good fortune is that the majority of our significant contracts in the South have come off or are about to come off in the last few months.
And as a result of that, we've been very successful in being able to renegotiate longer-term processing deals with more significant take-or-pay terms and higher fees as a result of the tightening capacity in the South. So stacking is full. Nordic and Brazeau are becoming close to fall. Nisaba in our Alder Flats is close to full. So as producers have conversations with us about being able to get comfort that they're going to drill a well and actually get it processed. We're in a position to be able to offer that service, and it's a valuable service and be able to get what we think is more representative value for that service than perhaps we were able to 3, 4 years ago when there was excess capacity in the system and the customer had a lot more choice. And they use that choice to negotiate probably more favorable terms than they are in a position to be able to do now. I hope that makes sense.
It does, yes. That's great color. And then maybe just sticking with the execution theme, sweating the existing assets on your Joseph Bird land position, curious where you're at in terms of expanding the storage and the rail capabilities to handle the increase in NGL production across the basin and perhaps also to support the low carbon hub strategy.
Yes, Pat, I think those are great questions. And you know what, before I pass that over to Jamie, first of all, I want to clarify that the expansions that we require for our NGL business especially as it relates to frac DF storage, we have a lot more capacity available at our existing KFS site and that would be the most economic area. If we required more capacity to add it at that site. We do have the potential to do that at the Heartland site. But again, more capital efficient as a first step to do it at CPS. But with that, maybe I can just turn it over to Jamie, and he can talk a little bit about the potential heartland development.
Yes, Pat. So I think you've hit the nail on the head with respect to sort of how we view that terminal evolving over time is that certainly, we continue to have lots of very encouraging conversations with folks around their energy transition projects, whether it's siding and locating those projects on our lands, which are, as Dean has mentioned in previous calls, very strategic in relation to adjacent to Dow, Shell Scotford our and plans is Fort Saskatchewan fractionation facilities. But as we look at building out that terminal, we think about it in phases. And the first phase would be more on the conventional natural gas liquids side because of the growth and the demand for additional takeaway capacity on rail and more efficient takeaway capacity on rail that is a differentiator relative to people's decisions around putting a more conventional manifest rail facility in. And because of the location, we can aggregate 3 or 4 companies aspirations to build out rail egress into one common efficient facility.
And then, as we build out the initial infrastructure on that terminal on the more conventional side, then we see opportunities probably to the mid to later part of the decade to build that facility out and leverage off the existing bones, if you will, to offer up being able to move product that's lower car [ph].
Okay, that's great. Thank you very much. Appreciate it.
[Operator Instructions] Your next question comes from the line of Anthony Linton from Barclays.
Maybe just to start and just kind of echoing some of the questions we've already heard today. Just on the -- just thinking about on return of capital, leverage looks is at the lower end of the range exiting the year. How are you sort of thinking about a dividend and a buyback as we move through the year?
Yes, that's obviously a great question. And we've always communicated to the market what our plan was, which was to get caps into service. Again, this is a $1 billion project. So it's very significant for our company. And from there, we'd obviously want to lower our cash flow streams to wrap up as we expect. And again, as Ilinguided in the report that we expect to generate a 6% to 7% EBITDA growth out to 2025. So we certainly believe that, that's going to support long-term sustainable dividend growth. And I would add to you with the acquisition of KFS, that would put us probably more in the high end of that 6% to 7% range. So we feel pretty good about that. So again, we want to get the pipe into service evaluate where our balance sheet is but this year is going to be the focus on our base business.
Jamie talked a lot about some of the long-term contracts that we're starting to sign here, and we think that there's more on the fairway. So that's going to set us up for future dividend growth. We're not in a position to comment when that is, whether that's later this year or next year, but we certainly see that's definitely something on the horizon.
Okay. Got you. That's helpful. And then maybe just on the marketing side of the segment. I appreciate you kind of give full guidance as we get into the spring. But could you just give some color on the headwinds and the tailwinds you're maybe seeing as we move through Q1 right now?
Sure. For sure, we obviously had a great year in 2022, a record year, almost hitting $400 million, which is pretty spectacular. But why don't I turn that over to Jamie and he can provide more color [ph].
I was going to 44 minutes into the call to get to March things that are going on in overall beyond marketing. But as Dean said, 2022 is an exceptionally strong year. But that said, we always come back to our base guidance, which remains at $250 to $280 per year. But there are a couple of factors that are encouraging for 2023, and I'll touch on those, I guess, is that there is the potential for a lower butane supply cost in our business. And we are a big consumer butane at AEF and other parts of our business. And then also just pointing out that we don't have any turnaround this year. And knock on wood, AEF continues to run reliably. We see obviously 23 relative to '22, the ability to see the benefit of Arinin at full capacity. Fundamentally, commodity prices, as we alluded to, are strong in North America driven primarily based on exports.
Really, Canada and the U.S. as a combination feeds is more and more feeding the world's demand. And as we see the macro fundamentals on the planet support more low-carbon or later in hydrocarbons, we're very bullish on commodity prices and the strength of those coin -- so overall, things look very favorable in 2023. But we will provide our updated guidance at our Q1 release in May; so stay tuned.
Awesome. Okay, that's great color. That's all for me. I'll turn it back.
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